We’ve all been there, at a store getting ready to check out when the cashier asks, “Would you like to save 20% on your purchase today by applying for our in-store credit card?” Before you answer that question, here are a few vital things to ask yourself before applying for a credit card.

• Do I NEED this card?
• Do I shop at this store often enough to use the card?
• What is the interest rate on this card and is there an annual fee?
• Do I want a store specific card or a universal card I can use anywhere?
• Is this REALLY worth the inquiry on my credit report?

Did you know each credit inquiry lowers your score roughly 15-30 points and will show on your credit report for 2 years. Opening new credit cards or “tradelines” can have a substantial effect on your credit score. If you are thinking about buying a home or a new car soon, remember multiple new tradelines may be seen as a negative by the lender and could result in a loan denial. While we recommend having a mix of different types of credit, you should also be cautious with the number of credit cards you open.

While the upfront discount may sound tempting, store credit cards commonly have annual percentage rates ranging from 25% to 30%!!! So, if you don’t pay it off every month you could end up paying a lot more for your purchases. Instead, check out the credit cards offered by your local community credit union. Most have more reasonable rates and offer incentives to their cardholders.

The WWFCU Financial Gurus recommend not to “impulse apply” but instead think about how adding new loans or credit cards will affect your long-term financial goals. Think of it as a “strategic plan” for your finances. If you would like to sit down with one of our Certified Financial Counselors to analyze your credit card situation, call us to schedule an appointment or stop by our lobby. We can provide financial coaching to find out what credit card may be right for you!

Don’t forget, WWFCU offers Visa credit cards with competitive rates, balance transfers, and 0% interest for the first 6 months. They also come with extra perks such as reward points, FREE Identity Theft monitoring and travel insurance. If you are in the market for a credit card to either build credit or to have for convenience, choose the one that will help you the most. Give us a call or stop by today to learn more!

Sincerely,

Your Financial Gurus