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Are store credit cards really a sweet deal? We ask some experts

During the holidays many stores offer incentives like 50 percent off a customer’s purchase that day, if they just apply.
Posted at 6:37 PM, Nov 29, 2022
and last updated 2022-11-29 21:22:52-05

CORPUS CHRISTI, Texas — As holiday shoppers pack malls and stores, businesses hope people will take advantage of their store credit cards.

Many offer incentives like 50 percent off a customer’s purchase that day, if they just apply.

Financial experts warn a sweet deal in the moment might not be so great for someone’s wallet later.

“It’s tempting with the offers they try to throw out there,” Alan Krockover said. “You know, use it today and save so much money and so forth, but usually those store credit cards carry much higher interest rates than if you have just a regular credit card from Visa or Mastercard.”

Krockover, an Edward Jones financial advisor, said to avoid those eye-popping offers, especially ones that offer zero interest for a few months.

“You just want to be careful that after that period of time, see what the rate, sometimes the rate goes up to double digits, high double digits rates,” Krockover said.

“These companies do make deals sound really good if you sign up for it,” Ryan Cervantes said. “And in the short-term, they see it as money I can spend and buy things with. In the long run though, if they don’t understand how interest rates and debt can affect them.”

Cervantes teaches foundations in personal finance at Flour Bluff High School.

“I teach kids how to manage their money and not put themselves behind an 8 ball early in life,” Cervantes said.

“I would say I’m good with money, but there are things I learn in this class every day that I didn’t know before,” senior, Zoey McDonald said.

“They’re about to be targeted by most credit card companies,” Cervantes said. “Trying to get them to apply and giving them money that they’re going to have to pay back.”

McDonald said thanks to Cervantes’ class, she has an emergency fund.

“I shattered my phone, like, here’s the money,” McDonald said. “Or I pop a tire or someone pops my tire or I’m like oh cha-ching, so I got it in the back of my pocket which I feel like is really great.”

Cervantes said it’s up to Zoey and her classmates to be financially independent after graduation and having the knowledge they do now can only help them in the future.

“You don’t need to go into debt, okay,” McDonald said. “And I feel like that’s really important for people my age to discover.”

Krockover recommended people look at the fine print if they decide to get any kind of credit card or try to build their credit. He said to look at websites that can help people find the right card with a low interest rate like bankrate.com.

“I think more students need to take a class like this because when they do get out of high school or college, it is now up to them to become financially independent,” Cervantes said. “And without these tools and background, it would be pretty tough.”