These Credit Cards Might Seem Like a Good Deal -- but Often, They Aren't

You may want to steer clear.

The holiday shopping season is kicking off, and that means that in the coming weeks, you may find yourself hitting a bunch of stores in an attempt to cross all of your "must-buy" items off your list. Now in the course of checking out, you may be offered a chance to apply for a store credit card. And you might manage to shave a nice amount of money off of your purchases by doing so.

But store credit cards also have their drawbacks. And it's important to know what those are before you apply for one.

The upsides of getting a store credit card

When you get a store credit card, you'll often score reward points that serve as store dollars. Plus, you'll generally get a discount on your initial purchase.

So, let's say you're buying $250 worth of clothing at a store and you have a chance to apply for its credit card. Doing so might mean snagging a 20% discount off your first purchase, thereby saving yourself $50 in the process.

Plus, some store credit cards offer ongoing incentives for cardholders. You may, for example, be eligible for discounts like 10% or 15% off purchases during promotional periods, and that's a deal that may be reserved for store cardholders only.

The downsides of getting a store credit card

When you get a store credit card, you can only use it at the store that's issued it. But when you apply for a new credit card, you get a hard inquiry on your credit report, which can cause a minor credit score drop.

It's one thing to deal with that drop in the course of getting a credit card you can use anywhere. But it's another thing to have your score drop for a card you can only use in one place.

That said, the big issue with store credit cards isn't the credit score ding so much as the high interest rates that tend to come with them. If you end up having to carry a balance on a store credit card, it could really end up costing you a lot.

Finally, the rewards you get from a store credit card can generally only be redeemed at the store itself. On the other hand, if you use a regular credit card to make purchases, you can snag cash back that can serve as actual cash -- money you can use to pay for essentials like food and utilities. Plus, store credit card rewards often expire, so you run the risk of them running out on you before you can use them.

Should you get a store credit card?

If you're not planning to apply for any other new credit cards any time soon and you're making a major purchase at a store you shop at a lot, then a store credit card could be a good bet for the savings alone. But if you're going to apply for and then use one of these cards, read the fine print very carefully so you understand the terms of your account.