Retail Cards, Score Concerns

Anonymous · ‎09-14-2018

All,

I'm moving to a new place and would like to get a card from American Furniture Warehouse. My scores now are:

Trans - 775

Equifax - 778

Experian - 765

I have two cards, one mine one authorized user. I was wondering if get a retail card from AWF and say it's a masters card. Will i lose points? Also once i'm done paying off the card and lets say want to close it a year from now, will it damage pretty badly?

one credit card has a 12 year history, the second card i have has a year and a half history. Should I do it or not?

Anonymous · ‎09-14-2018

A store card is treated and scored by FICO just like any other revolving credit card, the damage you will take would be the usual, inquiry ding and dings to your AAoA and reseting your AoYA to 0 months, as well as most likely to be high UTI as you plan to put balance on it and pay over time, just like a regular credit card.

In a year when you close it, it will continue to report as a closed account for up to 10 years so there will be no damage to AAoA, only possible damage would be your UTI due to losing your credit limit on that card (usually low for store cards) but that can easily be mitigated by reporting a lower balance on your other cards.

Anonymous · ‎09-14-2018

It would lower your AAOA to 4.5 years after getting the card. That won't make it that low. If you cancel it in a year it should stay on your reports for 10 years so it shouldn't hurt you to cancel it. I am guessing the card provides one year 0 interest for a purchase? If that is the case it might make sense to get the card.

K-in-Boston · ‎09-14-2018

You didn't mention what the credit lines are on your current cards, but with your stats (unless the 0% period they offer is exceptionally long like 2-7 years) I'd consider applying for an actual credit card that has a 0% introductory APR that you would either be interested in keeping or can later be changed into a card that you'd keep. Depending on the card, you could very likely end up earning rewards on the purchase and possibly a signup bonus - things not often offered with store cards.

Edit: After quickly Googling the card's terms, I would 100% go the way of a regular credit card with a 0% offer. Looks like the card offers 6 or 12 months at 0% with retroactive 28.99% interest on the original amount if not paid prior to the end of the promo period. (Example: You buy $3000 in furniture and pay it down to $100 but not completely off in 12 months. Your next statement now has $869.70 of interest added to the $100!) A few ideas: Amex EveryDay (15 months at 0%, 10k MR points + points for your purchase), BoA BankAmericard (15 months at 0%), BoA Cash Rewards (12 months at 0% + $200 bonus + points for your purchase), Chase Freedom Unlimited (15 months @ 0%, $150 bonus + points for your purchase) + many, many more options.

Anonymous · ‎09-14-2018

@K-in-Boston wrote:
You didn't mention what the credit lines are on your current cards, but with your stats (unless the 0% period they offer is exceptionally long like 2-7 years) I'd consider applying for an actual credit card that has a 0% introductory APR that you would either be interested in keeping or can later be changed into a card that you'd keep. Depending on the card, you could very likely end up earning rewards on the purchase and possibly a signup bonus - things not often offered with store cards.

+1

Anonymous · ‎09-14-2018

I do know some furniture store cards will report as a consumer finance account. That's definitely something you won't want on your report.