Department store credit cards suck.

You never need a department store credit card

At most department stores, you can’t buy anything without being asked if you would like to apply for the store’s credit card. To persuade you, the salesperson will offer you significant savings on your purchases that day.

So what’s a smart shopper to do? Should you apply for a credit card at every store you visit? Hold out for just the best offers? Or just say no to all store credit cards?

How I approach this dilemma

There was a time where I, like many shoppers, couldn’t turn down some free cash. Why wouldn’t I want to save 20 percent on my new $200 suit just by applying for the store’s credit card? An extra $40 in my pocket, just for spending a minute filling out a credit application? Why not?

Certainly, my time is worth that, and I even felt a little clever for taking advantage of this extra discount. But then I became a credit card journalist and started learning more about the credit card industry.

I compared the great variety of credit cards offered by the banks to the ones offered by retailers — and there was no comparison.

The most competitive credit cards offered by the major banks featured better benefits, lower interest rates, and superior rewards for spending at all retailers, not just a single one.

For example, the Macy’s credit card offers new applicants a one-time discount of 20 percent off their purchases, but it can only be used at their stores, since it’s not part of a larger payment network. Furthermore, it has an interest rate of 24.5 percent APR, even for customers with excellent credit.

Instead, I could get the American Express Blue Cash Preferred, which offers 3 percent cash back at select U.S. department stores — including Macy’s. Other benefits include 6 percent cash back at U.S. grocery stores, 3 percent  cash back at U.S. gas stations, and 1 percent cash back on all other purchases.

Here’s what really convinced me: The difference between the sign-up benefits of the best credit cards and the discounts offered by store credit cards.

For example, the best airline cards now offer 50,000 to 100,000 frequent-flier miles to new applicants. Those 50,000 miles can equate to two domestic, round-trip tickets in economy class, while 100,000 can be enough for a single, business-class round-trip ticket to Europe! Other cards might offer two free nights in a luxury hotel, or even as much as $500 cash back.

Those bonuses are worth far more than any discount I was likely to receive from a store charge card.

Another way to look at it

Let’s assume that you can’t apply for every credit card in the world, and you probably shouldn’t apply for a credit card at every store you visit. In fact, credit experts say that most consumers should have only a handful of credit card accounts open, perhaps three to six, in order to achieve the best credit score.

So if I decide that I’m only going to have five credit card accounts open at any given time, then I want to narrow my choices to the best products available. Or to look at it another way: There are lots of great cars on the market, but I only have room for two of them in my garage. So perhaps I’ll make the most of my space by having a pickup truck and a sports car, or a sedan and a minivan.

Likewise, cardholders might have one credit card for use when they travel, and one for when they shop. Or they might choose to have a card that offers great rewards for when they pay their balance in full, and another that features low interest rates for when they have to carry a balance.

When you look at credit cards this way, you’ll eventually realize there isn’t much room in your wallet for a department store credit card, even if it happens to offer some initial savings.

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