Chances are that when you’re ready to check out at a store, you’ve had a cashier ask you if you want to save 15% on your purchase. That might sound like a good deal, but in order to get that discount, you have to sign up for a store credit card.

There are both good and bad aspects of store credit cards, so be sure you know what you’re getting into before you sign up. You should always read everything when you sign up for a new credit card – especially the fine print. This quick guide will make sure you know what to watch out for next time you’re tempted to sign up for a store credit card.

Effect on your credit score

While store credit cards do show up on your credit report and affect your credit score, they don’t affect it very much. Making payments on time might help improve your score a little bit, but not very much. When the formula for determining credit scores was established, the developers designed it so that store cards wouldn’t have much of an effect.

Credit limits

Store credit cards are notorious for starting you out with low credit limits. These are normally anywhere between $100 and $500. You should never have more than 35% of your total credit allowance filled at any time, so if your limit is only $100, you won’t even be able to buy a pair of pants without crossing the 35% threshold.

Interest rates

Store credit cards also come with extremely high interest rates. That 15% you saved on your t-shirt might look good at the time, but it won’t mean anything when you’re paying 30% interest.

Limited usage

There are a few store credit cards that function like normal credit cards, but most can only be used at their particular store. So unless you shop at that store all the time, signing up probably isn’t worth it. Even if you do, you’ll probably be paying lower interest rates on another card anyway.

If you or someone you know is struggling with credit card debt, fear not. Help is out there. There are a great many bankruptcy alternatives that consumers can make use of today.