You’re at the register of your favorite retail store and you’re asked, “Are you interested in saving 20% today by applying for a credit card?”. While 20% off sounds tempting, there is a lot to consider (outside of that discounted offer) when deciding if a store credit card or traditional credit card is right for you.

Here are some things to consider when making your decision:

• Where can you use the credit card? Most major retailers offer store credit cards – also known as retail cards. Many of which can only be used for making purchases at that store or sister companies. Traditional credit cards are offered by major banks and credit unions and can be used at any store and for any type of purchase (gas, groceries, monthly subscriptions, etc.).

  
  

• What is the Annual Percentage Rate (APR)? A high APR means that if you don’t pay off your balance in full and on time every month, you may end up paying more in interest than you bargained for. Store credit cards often have a much higher APR than traditional credit cards.  

  
  

• Does the credit card offer exclusive perks or rewards? With store credit cards, rewards are typically earned from making purchases through them, which is usually redeemable for a discount off your next purchase (like saving 5% on your next purchase of $75 or more). Traditional credit cards offer rewards earned on everyday purchases like gas, groceries and ordering takeout; the best part, you can redeem them for things like cashback, name-brand merchandise, gift cards and more!

  
  

• What’s the credit limit? Store (retail) credit cards usually have lower credit limits than traditional credit cards. A credit limit is the maximum amount you can borrow using a credit card or line of credit. Retail store cards usually have limits near a few hundred dollars, while traditional credit cards can have limits well in excess of $25,000.

  
  

To learn more about which credit card option is right for you, please visit our Northeast Credit Cards page.