KSL INVESTIGATES

Gephardt Busts Inflation: Why you should think twice about signing up for store credit cards

Nov 14, 2022, 10:37 PM | Updated: 10:52 pm

SALT LAKE CITY — It sounds like a great deal — save 15%, 20%, even 30% on your purchases by signing up for a store’s credit card. As tempting as it sounds, you may want to think twice.

“A lot of us are going to hear that pitch this year,” Ted Rossman, senior industry analyst for CreditCards.com, said. “I would be very cautious.”

We asked Rossman to break down the pros and cons of going with a store-branded credit card. Let’s start with really, the only pro. Yes, they can save you money on the spot and maybe on future purchases at their store.

“If it’s a store that you love and you shop there all the time, and you’re paying in full and avoiding interest, yeah, then maybe it does make sense to get their card,” he said.

But there are potential downsides — the biggest being high-interest rates. We dug into the terms and conditions for a few cards from popular retail chains. Keep in mind, the average credit card interest rate right now sits at 19.04%.

If you want a card from Old Navy / The Gap, expect an interest rate of 28.99%. Macy’s credit card will slap you with an interest rate of 29.74%. Meanwhile, the card offered by Dick’s Sporting Goods carries a 29.99% APR.

And be especially cautious of stores that offer credit cards with promises like, “No Interest for 12 Months!” Usually, that means deferred interest. In other words, you have 12 months to pay the card off, but if you get to 12 months and just one day, not only does the interest kick in, but it also charges you retroactively for all the interest that would have accumulated for the whole year.

“It’s a nasty tactic that a lot of store cards do,” Rossman said.

Here’s another negative: applying for a store credit card will hit your credit with a hard inquiry that drops it temporarily. If you are applying for several cards at the same time, that is going to add up to a significant drop in your credit score. So, you might want to sign up for just one card instead of a whole bunch.

KSL 5 TV Live

Top Stories

KSL Investigates

Matt Gwyther (left) and Dennis Rowley Gwyther (right). (Photo Provided By: Matt Gwyther)...
Daniella Rivera

How mental health staffing shortages are delaying justice in Utah’s courts

A Utah man waiting for justice after the 2019 murder of his husband says staffing issues at the Utah State Hospital have contributed to months of delays in court.
22 hours ago
...
Mike Headrick and Cindy St. Clair, KSL TV

Newly built homes deemed unlivable due to sliding soil

If you want to know what a sinking home sounds like, just ask Eric and Carole Kamradt.
2 days ago
Brenda White cookies...
Matt Gephardt

Gephardt Busts Inflation: Rent prices down nationwide but very high in Utah

All over the country, the cost of rent is finally starting to go down. But that is not the case here in Utah.
4 days ago
...
Matt Gephardt

Get Gephardt: Cybersecurity experts caution shoppers to take it slow while shopping online

For many of us, Christmastime is magical. For scammers, it’s especially magical. Here's what to beware of when shopping online.
10 days ago
Gephardt makes butter...
Matt Gephardt and Sloan Schrage, KSL TV

Gephardt Busts Inflation: Can you save money by making your own butter?

Prices for groceries are up, but the price we pay for butter is way, way up – to the point it will impact your holiday baking budget.
11 days ago
(KSL TV)...
Matt Gephardt & Sloan Schrage, KSL TV

Packed holiday flights: How SLC Int’l stacks up against US’s largest airports in delays and cancelations

Travelers, brace yourselves: holiday flights will be packed.
11 days ago

Sponsored Articles

house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 reasons you may want to consider apartment life over owning a home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to choose what MBA program is right for you: Take this quiz before you apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t let a ransomware attack get you down | Protect your workplace today with cyber insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Hand turning a thermostat knob to increase savings by decreasing energy consumption. Composite imag...
Lighting Design

5 Lighting Tips to Save Energy and Money in Your Home

Advances in lighting technology make it easier to use smart features to cut costs. Read for tips to save energy by using different lighting strategies in your home.
Portrait of smiling practitioner with multi-ethnic senior people...
Summit Vista

How retirement communities help with healthy aging

There are many benefits that retirement communities contribute to healthy aging. Learn more about how it can enhance your life, or the life of your loved ones.
Gephardt Busts Inflation: Why you should think twice about signing up for store credit cards