Store cards to build credit

Where you can talk about store credit cards, like gas station cards, department store cards, etc.
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Store cards to build credit

Postby Cizz » Wed Feb 22, 2017 12:55 am

My credit is young, so I've been considering the shopping cart trick to get a couple cards without HP to help my credit. I think I'd do just fine keeping them open and being responsible with them for the next few years. And I'd stick to a couple stores I won't grow out of for the next 10 years or whatever, so could that be a good option to help build my baby credit?

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Re: Store cards to build credit

Postby Vattené » Wed Feb 22, 2017 11:44 am

I think store cards are a great option to build credit; however, since you already have a Discover and Chase Freedom you don't necessarily need them.

They could still help you in the long run. I established my credit with a bunch of store accounts. It wasn't an intentional strategy to build credit, but by the time I got wise to the benefits of credit cards and rewards I had a decent profile for someone in his early twenties and could get just about any credit card I wanted. Establishing accounts early on will build history and give you more records of on-time payments, so after a few years you will be in a good position. If you want to apply for any other credit soon (for example, if you think you'll be needing a car loan within a year) this could hurt you. Even if you just want to apply for good rewards cards, having a short credit history and several new accounts will not look good. Even if you avoid HPs, your AAoA will be tanked. You already have good rewards cards, so you don't need store accounts as a stepping stone.
FICO-8: EX - 827 (5/17) | TU - 824 (5/17)
My Cards: Barclay Arrival+ | Discover it | Amex ED
AU:: Discover Miles | BofA BBR | Barclay Commence (SD'd)

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Re: Store cards to build credit

Postby CarefulBuilder14 » Wed Feb 22, 2017 3:17 pm

With a Discover and Freedom already, definitely focus on quality over quantity with new cards.
Warranties and sketchy merchants: Schwab Platinum
Price rewind: Costco
Travel insurance: Prestige, CSP
Perks: IHG, Hyatt
Rewards/Offers: Discover, Freedom, ED, BCE
Taxes/Misc: SPG

Limited value, might close: Arrival

Might add: First Tech, proper business card

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Re: Store cards to build credit

Postby TXviking » Fri May 05, 2017 12:43 pm

Focus on quality over quantity, yes, but also keep in mind that number of accounts is also a criterion. The more accounts you already have that are in good standing, the more at ease new issuers are with granting you credit.

This has its limits. At some point, your total available credit (what issuers call "potential debt") becomes a liability, even if you don't actually have outstanding balances. But you're not at that point yet.

I would consider adding one, or at most two store cards to your credit mix, no more than that. Others rightfully pointed out that you don't NEED them, but they do help a young credit file become less thin, which is a useful booster in the future.

My very first credit card was a Target department store card with a measly $300 limit. But it was a start, and since I did a lot of my household goods (or "dormhold goods") shopping at Target at the time, it was a good match for me.

TL;DR: Don't get cards just to put them in a drawer, but if you have some favorite department store you go to a lot, consider getting their card.

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