Resist Store Credit Card Offers

Retail store representatives unfailingly try to get you to sign up for their retail-branded credit cards. “You can save 15% off your purchase today by signing up for our credit card.” They get incentives for each person who signs up for a credit card. So, saving you 15% is agenda-pushing at its best.

Given that store credit card interest rates are in the 20% range, you don’t really save 15% on your purchase unless you pay your balance in full when the first statement comes in the mail. And how many of us actually do that? You can get much better interest rates on non-retail-branded credit cards that you can use in multiple places.

Another reason you should say “no” to store credit cards, it’s never good to sign up for a credit card on impulse. Instead, you should shop around for a credit card based on your spending habits – not the stores where you shop. Even annoying credit card mail offers send you the interest rate and fees for the credit card. Store credit cards don’t give you that luxury. They expect you to open up a new credit card without giving you any information about the card, for $15 off your purchase.

Then, consider the impact of a new credit card on your credit score. First, your credit score takes a hit when you make the application for credit. An inquiry is placed on your credit report and influences your credit score for 12 months. The inquiry doesn’t fall off your credit report until 24 months have passed.

Store credit cards typically dole out credit like there’s a credit famine. You can count on having a low credit limit. Your credit utilization will increase which will cause your credit score to drop a little more.

The list of cons for a store credit card outweigh the pros. Don’t let an offer to save you a few bucks cloud your judgment.

Credit Crisis Could Bring Credit Repair Scams

The credit crisis has brought with it an increased number of companies claiming they can repair your credit. To someone stuck in a bad credit situation, these promises sound tempting, but when it comes to credit repair companies, things are never as they seem.

Credit repair organizations can’t work the magic they’d have you believe they can. Legally, they cannot do anything to help your credit that you can’t do yourself. The same credit laws prevent you from removing accurately reported information from your credit report hold true for credit repair companies. For example, if you really did file bankruptcy 3 years ago, that bankruptcy has to remain on your report for at least 4 more years, 7 years in some cases. If you didn’t file bankruptcy, then you can submit your own credit report dispute to have the entry removed for absolutely free.

Considering the Federal Trade Commission says they’ve never seen a legitimate credit repair company, it’s safe to assume all credit repair companies are a waste of time.
Credit repair companies have to follow the federal law called the Credit Repair Organizations Act. You should avoid any company that’s not following that law.

Any credit repair company you deal with has to give you a pamphlet titled “Consumer Credit File Rights Under State and Federal Law.” They’re also required to give you a copy of your contract before you’re asked to sign it. This contract has to spell out how much you have to pay, what services will be done, the date or time period for doing the services, and a statement letting you know you can cancel the contract within 3 days of signing. The company’s name and business address should be on the contract.

You don’t have to pay for any services before they’ve been done for you. If a credit repair company asks you to, look for another one.

No credit repair company should promise to remove accurate information from your credit report. Nor should they suggest you create a new identity.


A sure sign of a scam is an agency that asks you to sign away your rights under the Credit Repair Organizations Act. Credit repair companies aren’t allowed to ask you to do this and even if you do, the waiver isn’t legally binding.

If you’ve dealt with an unscrupulous credit repair agency, you can report the Federal Trade Commission (www.ftc.gov) and your state’s Attorney General.