Are store credit cards bad for your credit?

**torreyha** · Oct 17, 10, 1:08 pm

I have heard conflicting opinions on this. Are store cards bad for your credit or not? My brother says that they look bad to have on your credit report because they usually opened by subprime customers, is that true?

**JL70** · Nov 7, 10, 7:02 pm

Originally Posted by torreyha

I have heard conflicting opinions on this. Are store cards bad for your credit or not? My brother says that they look bad to have on your credit report because they usually opened by subprime customers, is that true?

I don't think that statement is correct. They can be as good or as bad as any other card, all depends how good or bad you manage them.

**mrs mays** · Nov 12, 10, 11:28 pm

I would like to know how store credit cards are bad for your credit too because I was planning on getting one to improve mine!

**torreyha** · Dec 10, 10, 2:18 am

I know it depends on how a store credit card is managed but my brother is a mortgage broker. He said that he frowns upon seeing some of the known sub prime cards when an applicant's credit report is yanked. I know credit cards are not bad for your credit score but would the appearance of a sketchy card turn someone off that's reviewing the application? Probably most store cards are fine and I guess a more accurate question would be if the sub prime credit cards with a bad reputation look bad to someone who is reviewing your file?

**sdfinch** · Dec 27, 10, 6:09 pm

Store cards do not hold up the same as a Major card from Visa or MasterCard. Stores like Sears and HomeDepot use Citibank as their credit card/bank service. So I think you would be safe with something like that. But a store like Kohl's or small retail stores might be Union Plus/HSBC bank. You are better off applying for a real credit card and using it at the store. Store card will always have a high rate, unless you have some teaser promo.

**Pete838** · Dec 28, 10, 6:17 am

I think there is definitely a hierarchy among cards, but probably not because of the issuing bank as much as the limits of the card. The FICO formula is a pretty closely guarded secret, but it's all based on numbers. For instance, if you have 5 store cards with $300 limits, vs. a Visa card with a $1,500 limit they are looking at different factors on each scenario.
-How old is the oldest account?
-How many accounts?
-Total available credit?
Because each issuing bank has their own standards and key factors they are looking for, each scenario may be attractive to a different type of creditor. If you are looking to get an AMEX Gold, they would probably want to see a longer history on a higher limit card.Capital One may be looking for people with 'newer' credit, like good history on store cards, and AMEX will look favorably at that Capital One card on your report. Your score plays a part, but there are other factors.
You aren't going to go straight to a $20k super duper platinum card, or from a $300 limit store card to a $20K limit super platinum card overnight. But by selecting and responsibly using different credit products in the credit card hierarchy as stepping stones along the way you can get there in a matter of a few years, and the higher up the chain you get you increase your standing for car loans, home loans, and business loans increases as well.

**naomibatac** · Nov 29, 11, 10:12 pm

Any kind of credit card would be bad for your credit if used improperly. This means, if you go over your credit limit, delayed in your payment, or pay only the minimum and not able to pay off your balances; your credit score will go down. There are several types of credit cards and each has its own purpose, features, and advantage. You just have to choose which is the best for you and manage it well.

**FutureBillionaire** · Nov 30, 11, 9:59 am

The big caution with store cards is the fact that folks apply for many of them just for one time perks that aren't that great. I have one store card that I use because I buy the majority of my clothes from there. I won't be opening cards at stores just to get one tie 15% discounts though.

**PlatinumAMEX94** · Jan 7, 12, 10:57 pm

It is bad if you get a store card with a $500 limit, and you decide you want that 10% so you max it out. Now your credit usage went through the roof, and now your credit score is going to drop. This happened to my brother when his wife decided to open a Target card.

Thread: Are store credit cards bad for your credit?

LinkBack

Thread Tools

Display

Are store credit cards bad for your credit?