Specialized Consumer Strategies - Three Ways Store Credit Cards Affect Credit Reports

Specialized Consumer Strategies provides financial options and budget plans to their clients who are in debt and have bad credit. They were established eight years ago in response to banks and lenders increasing their interest rate charges, regardless of a person’s individual financial situation.

Specialized Consumer Strategies strongly advises their clients to avoid using and even applying for store credit cards because of the negative ramifications they can have on credit reports. While store credit reports seem like a good deal at the team, in the long run, they have bad effects on a person's finances. Here are three ways that store credit cards affect credit reports.

• Using a store credit card responsibly will help a person's credit score, but that do not significantly help scores and are no way near as effective as regular credit cards are. Additionally, it is difficult to use a store credit card responsibly because they are easily forgotten about and, therefore, the balance is disregarded.
• Store credit cards usually carry grossly large interest rates, way above the already high market rate for credit cards. If a balance is carried on a store credit card, the charges will be astronomical and can become difficult to pay off. If a balance is not properly paid off, the cardholder will be reported to credit bureaus, thus affecting that person’s credit score.
• Lastly, store credit cards usually have low credit limits. This makes it easy for cardholders to max out their cards, which means that penalty fees and late fees start to rack up. This puts the cardholder in a difficult financial situation and could lead them to miss payments, thus affecting their credit score.