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Are there any disadvantages to store cards?

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CBrent
New Contributor

Are there any disadvantages to store cards?

My score has risen to the point that I'm being approved for store cards, which is great, but I'm wondering if there is any downside to having multiple store credit lines.  They would have little utilization each month, and would always be paid in full or, at most, under 10%.  

Message 1 of 9
8 REPLIES 8
Anonymous
Not applicable

Re: Are there any disadvantages to store cards?

I have seen varying responses to store cards.  Some say too many hurt you when trying for the bigger/ better cards.  Others say they are slow to increase. Some are just hooked on the approvals and get as many as they can lol  I have 2.  I went for Overstock because I have read it increases more than others.  I am not getting any additional store cards.  I am holding out in hopes of getting a good credit card with rewards or cash back.

Message 2 of 9
RobertEG
Legendary Contributor

Re: Are there any disadvantages to store cards?

Fair Isaac has stated in the past that they dont have the same scoring weight as bank cards, but no specifics were given.

 

My primary concern would be to ensure having at least one bank card, regardless of the number of store cards.

I have seen credit scorecards (non-FICO)  that use the presence of at least one bank card as a bucketing criteria.

 

Message 3 of 9
StartingOver10
Moderator Emerita

Re: Are there any disadvantages to store cards?


@RobertEG wrote:

Fair Isaac has stated in the past that they don't have the same scoring weight as bank cards, but no specifics were given.

 

My primary concern would be to ensure having at least one bank card, regardless of the number of store cards.

I have seen credit scorecards (non-FICO)  that use the presence of at least one bank card as a bucketing criteria.

 


Is there such a thing as too many bank cards for FICO scores? In other words, will your score get a hit if you have either too many as a percentage or too many as an absolute number?

 

What other bucketing criteria can you tell us about in FICO scoring?

 

Message 4 of 9
dragonfly66
Frequent Contributor

Re: Are there any disadvantages to store cards?

My experience has been that store cards are a good way to establish your credit.  If you pay them on time, they will help your score (which will help with getting approved for the bank cards), if you don't they will hurt your score.  I do agree with RobertEG in that they aren't given the same weight as a bank card when FICO scores them, but I'm not sure how having them will hurt anything unless you aren't paying them on time.  A good way to gauge the store cards you need would be to consider where you shop the most, and if having their cards will get you better discounts at those stores.

Current - FICO 3/2019: EX(753); EQ(763); TU(749)
Beginning - FICO 7/2014: EX(630); EQ(608); TU(581)
Credit: Wells Fargo Home Projects Charge Card ($7,800); Wells Fargo Home Rebate Visa ($4,000); Capital One Quicksilver ($10,000); Capital One Venture ($6,000); Discover it ($7,900); Macy's ($20,000); BrandsMart ($4,000); Banana Republic ($1,200); Lowes ($12,000); Amex Everyday ($30,000); Macy's Amex ($15,000); Amex Platinum (NPSL); Citi Diamond Preferred ($9,000); Chase Freedom ($9,000); Wells Fargo Outdoor Solutions ($10,000); SunTrust HELOC ($25,000)
Message 5 of 9
CBrent
New Contributor

Re: Are there any disadvantages to store cards?

Thank you for all the good answers.  Last night, mostly out of curiosity, I tried the shopping cart trick at Victoria's Secret. It worked, but that's somewhere I know I'll never shop, not even for women I know. I have and will use a J Crew card, as well as a Blair card for my mother. I think I'm just going to cancel the Victoria's Secret card. My understanding is that they never even report to the CRAs unless the account is being used, which it will not be. 

 

I was recently approved for three bank credit cards with low credit limits of $500: Capital One, Barclays and Chase. I think the best thing to do now is garden, using and paying those cards responsibly, and focus on credit limit increases over the coming year. I also have a Shell gas card, which is backed by CitiBank.  Additionally, I have two long-standing student loans. So I have a good credit mix, it seems. 

Message 6 of 9
GirlMelanie89
Established Contributor

Re: Are there any disadvantages to store cards?

Prior to my bankrupcy, I had several store cards and LOVED them. Score was only mid 600s but I got several discounts from the stores which my CC was in. Walmart card was .10 off gas, VS, TJMaxx, Old Navy, etc. sent coupons for free stuff every month! It was fun while it lasted!
Bankruptcy discharged: May 2014 Starting Score: 571 Goal Score: 700
Current Score: 676 (EQ FICO) 674 (EX FICO) 662 (TU FICO)

Mortgage Loan Originator in Kentucky
Message 7 of 9
App_Addict
Valued Contributor

Re: Are there any disadvantages to store cards?


@CBrent wrote:

Thank you for all the good answers.  Last night, mostly out of curiosity, I tried the shopping cart trick at Victoria's Secret. It worked, but that's somewhere I know I'll never shop, not even for women I know. I have and will use a J Crew card, as well as a Blair card for my mother. I think I'm just going to cancel the Victoria's Secret card. My understanding is that they never even report to the CRAs unless the account is being used, which it will not be. 

 

I was recently approved for three bank credit cards with low credit limits of $500: Capital One, Barclays and Chase. I think the best thing to do now is garden, using and paying those cards responsibly, and focus on credit limit increases over the coming year. I also have a Shell gas card, which is backed by CitiBank.  Additionally, I have two long-standing student loans. So I have a good credit mix, it seems. 


Please note that your VS card WILL report, you do not have to use for this to happen.  If you got it, it will report so there would be no benefit for you to cancel at this point.

CURRENT SCORES: TU: 698 21 Apps / EX: 644 28 Apps / AAoA: 4.4 Yrs. / Util. 5% / Goal: 750 by 12/22

Message 8 of 9
Pway
Valued Contributor

Re: Are there any disadvantages to store cards?

Store card are easier to get rather than a major credit card.  Although their credit limits are very low.  I would caution with store cards.  The opening rewards are good but how often do you shop at that store. 

Thank you for the wealth of knowledge I have learned from these forums. I am logging off as of November 9, 2022. I wish everyone great success.
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