While shopping, I bet you’ve been asked if you’d like to sign up for a store credit card. When you’re signing up, many stores will offer you a discount on your purchase if you do it immediately at the counter.

This happens at almost every department store you step foot in. My usual response is denying their offer, making my purchase, and walking out.

Then it happened. After seeing all these commercials for getting a free credit score, I checked mine. I sat back in horror at how low it was. After reading a lot about how to improve my credit score, it turns out getting department store credit cards may raise your score and prevent you from having to resort to bad credit loans.


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Saying Yes to Department Store Credit Cards

Quick Request Process

When you are signing up for department store credit cards, they complete the approval process right at the register, making the process similar to getting a quick loan. Sometimes they will have you hand them your driver’s license, address, and social security number, and they will ask a couple of verifying questions. They send it out and it often takes less than a minute to get sent back.

Approval isn’t guaranteed when you have a lower credit score, but you’ll know if you’ve been approved or rejected right away. It’s easier to get these types of credit cards with a lower credit score. The decision is instant.

Approval For Low Credit Scores

When it comes to department stores, store credit cards for bad credit are approved fast and with less prejudice. Banks partner with retail stores to provide a lower credit card approval rate.

While these cards are not personal loans no credit check, they do allow you to qualify with a credit score as low as 500. When someone puts in for a request and it meets those requirements, banks take them as a customer. If this customer were to walk into a bank branch, they may not get approved for this card. The partnership between banks and retailers requires the banks take on risky customers.

If you’re requesting credit cards online with a low credit score, your chances of getting approved are lower. This deal between banks and credit cards online does not exist for many credit card providers.

Search Online First

Much like taking out an online loan, if you search online first, you will be prepared when you go tot he cash register. You can see what credit card would provide the lowest interest rate that you could request in the store. Having the research allows you to pick the best credit card to help you boost your credit score.

There are websites you can go to that will help you search for cards you could get approved for with your credit score. The best part is they will only put a soft pull on your credit when searching, instead of a hard credit report pull. When you have a hard inquiry, it could be detrimental to your credit score.

Credit Limit Increases

You put in a request and you get approved. Now what? How do you improve your credit score? Opening a card increases your credit limit. Having an increased credit limit can bring a positive light to your credit score.

You’ll know that your credit score is improving when you begin to get a bunch of direct mail pieces. Companies love to send credit card offers when you have a good credit score. Keep an eye out for those, as annoying as they can be.

Increasing your credit limit means you can spend more, right? True, but you want to avoid spending any more than you were before. In fact, the less you spend, the better your utilization rate will be.

Utilization Rate Decreases

Your utilization rate is related to your overall credit limit. Opening department store credit cards increase your credit limit and lower your utilization rate. When you have a low balance on a credit card, and a high credit limit, this shows that you are not a risky customer.

The more you prove you aren’t a risky borrower, the more you can raise your credit limit. When your credit limit is raised, if you continue to spend minimal, your utilization rate will continue to decrease.

If you go overboard with your new credit limit and begin racking up a balance, your utilization rate is going to change. Credit card providers have the ability to drop the credit limit whenever they please, possibly hurting your credit score.

Keeping Your Spending At Bay

Acquiring department store credit cards can be positive for your credit score if you do it right. If you’re overexcited with the idea of having more credit to spend, you can do more harm and end up dropping your score even more. Knowing your limitations and behavior is a great way to keep your spending at bay.

Know Your Limits

If you are the kind of person that runs to a sale or can’t pass up a good deal, getting a credit card may not be right for you. This could cause debt and make your bad credit score, even worse.

If you have great self-control, this is best. You can use your card on a regular basis, making sure you pay off the balance right away. Using a card regularly and being responsible with it shows bank and credit card companies you are not risky. This is an effective way to build your credit score and your credit reputation.

Treat it Like Cash Or Debit

When you’re using a credit card, your bank account doesn’t reflect your charges. This means they can pile up and until you log in and check your account, you won’t know how much debt you’ve acquired.

It’s easy to keep swiping when it doesn’t immediately affect you. Keep a budget and adhere to it. Only spend what you know you have in your bank account. Don’t use it to purchase things you couldn’t normally afford.

The more you owe, the lower your credit score is going to be. When FICO takes into account the factors of what builds or breaks your credit score, how much you owe is a big one.

Pay it Off Immediately

Paying off your card right after you have used it is the best way to build your credit. Going on a shopping spree buying things you couldn’t normally buy, and then not being able to pay it off, will hurt your credit score.

Department store credit cards are easy to acquire but require responsibility to maintain. Make sure you are ready for the challenges that come along with that.

Having a good credit score shows that you are making payments on time. If you have late payments on every card you open, you won’t have good credit. This could make buying a house or a car difficult.

Getting a Loan

Your credit score reflects how well you are at managing money. A bank will not agree to give you a small personal loan if they see you are poor at money management. If you can get department store credit cards and work to rebuild your credit reputation, you can reverse your poor credit score.

When you pay in full, your interest rate doesn’t affect your payments. You won’t get charged for interest and your payments will only be from items you have bought.


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Think About Your Purchases

Think about what you’re buying. Be smart with the purchases you decide to make. If a department store is offering a discount based on the fact you have a card, watch these sales. While it is enticing, these can get you in debt quick.

Most department store credit cards have high interest rates, and racking up a balance, will make it difficult to pay. If you choose to get a card to help you build your credit, think about if you need or want the thing you’re buying.

If you find you’re buying things you want because of a sale, it’s time to stop. This is the beginning of debt and how bad credit scores are made!

Keep it Open

Having department store credit cards open for a long period of time makes your information trendable. Credit card providers will be able to track your trends and see if you’re trustworthy. You become a low-risk customer when you are transparent and predictable.

Keeping your accounts active, open, and in good standing helps to raise the average age of your accounts.

When you open a credit card for a sale and close it after, you’re hurting your credit score. Credit card reports take the average age of all of your credit card accounts. If you have one that was only open for a week, it’s going to have a negative impact on your average credit card age.

To Credit Card or Not

Next time you go to a department store, listen to their spiel. When they ask if you want to sign up for department store credit cards, ask them if they can tell you a little more information about it. If the interest rates are relatively low, and it’s a store you know you can watch your spending at, sign up.

If you are approved, you can take the necessary steps to begin rebuilding your credit score and repairing your credit reputation. To take a look at a list of credit cards that are beneficial for bad credit, check them out here. Bonsai Finance also has great information and advice for all your personal finance needs, whether you are looking for a payday loan no credit check or an installment loan for bad credit, make sure you read up before taking that next step!