‘Tis the season to be offered store credit cards! You spent hours scouring the internet and countless stores for the best possible deal, haven’t slept much in weeks thanks to your kids’ Elf on the Shelf, and finally have your purchase in hand, ready to check out. You need caffeine. 

“How would you like to save 20% by charging this to your new store credit card today?,” the friendly sales associate asks. 

20%? The sales associate now seems like your new best friend! Saving 20% on this purchase will make all of your holiday stress melt away! The clouds lift! The sun shines through! Maybe there is peace on the other side of the holiday hustle and bustle. Without reading the terms and conditions you eagerly sign the form and grab your bag, visions of sugar plumbs dancing in your head.

And then the bill comes in January. The introductory APR expired and you’re left with a ridiculous interest rate, a handful of fees, and one more bill you have to figure out how to pay. 

We’ve all been there! This week, the Consumer Financial Protection Bureau (CFPB) released six tips to consider before you sign up for store credit. As you think about those last-minute holiday purchases and the store credit card offers that will inevitably come, keep these tips in mind:

  1. Keep an eye on your overall holiday spending! Before making a purchase, make sure you’re still on budget, regardless of how good the credit offer may seem.
  2. Pay your bills on time. If you do take out the store credit, be sure to avoid late fees and any actions that might hurt your credit score.
  3. Know the difference between zero-interest and deferred interest in store promotions! For example, if the offer is to pay no interest IF you pay off the debt in twelve months, that typically means that you’ll have to pay all of the interest going back to the date of your purchase. A little “if” can make a BIG difference, so make sure you understand what you’re signing up for and what will happen if you don’t pay off the card within the promotional period.
  4. Limit the number of cards you apply for. Signing up for too much credit too quickly can negatively impact your credit score and make it difficult to get help from creditors if a true emergency need arises. 
  5. Don’t get close to your credit limit! Maxing out all of your cards can also have a negative impact on your credit score. A good rule of thumb is to try to keep your balance at less than 30% of your credit limit.
  6. If you can’t pay the bill, don’t wait for collectors to call. Call your creditors immediately to see what kind of assistance programs they might have to help keep your credit score intact. You worked hard for that number! Don’t lose it in a moment of weakness at the checkout.

To read more from the CFPB so that you’re prepared when the kind sales associate makes the pitch, click here. Or beat the store to the punch and find out what kind of credit card Multipli can offer you today. To apply Click Here.