It is a common practice for department stores to offer tempting discounts on a purchase for applying for one of their store branded credit cards.  Though these offers may seem lucrative, experts agree that consumers should generally avoid store credit cards.  Store branded credit cards typically have high interest rates and can often be detrimental to a person's credit score while exposing them to identity theft.   

Chief executive of LowCards.com, Bill Hardekopf said, "Many store credit cards offer nice incentives — like free gift wrap with a Macy’s card — but what comes with them, in most cases, is an outrageously high interest rate.” 

According to a study conducted by U.S. Rep. Anthony Weiner, the average annual percentage rate of store credit cars is 23.83 percent.  In comparison, the average interest rate for bank issued credit cars is 13.81 percent.   

Cristy Cash, director of counseling for Consumer Credit Counseling Service of Oklahoma commented, "If you charge $500 of merchandise on a store credit card with a 21 percent interest rate and make only minimum payments, it’ll take you 10 years to pay it off and you’ll spend another $700 in interest." "And that’s if you can resist the additional coupons and promotions the company sends you and never charge anything else on the card.”   

Cash also added that a credit card application or credit inquiry could lower a person's credit score by up to thirty points.  Debt to credit ratio dictates thirty percent of a person's credit score while their payment history makes for thirty-five percent.  With this in mind, a single late payment can drop a FICO score by as much as 120 points.  In addition, because store credit cards typically have low limits, the debt to credit ratio can easily be impacted.  Cash added, "If your credit limit is $500 and you charge more than $250, get ready for your score to drop.” 

Negative effects on a person's credit score can make it difficult for individuals to apply for a home loan.  A mortgage banker with Bank of Oklahoma, Linda Turner said, "Adding new debt may lower your score enough to cost you thousands in closing costs or increase the debt-to-income ratio enough to where you could not qualify for the loan.”