If you want to build up your credit or repair your old credit, departmental store credit cards comes in handy. This is because these cards easily get approved even with a bad or with no credit. However, you should use these cards exclusively for the purpose of building up credit profile. Some of the leading departmental stores like Macy’s and Wall Mart now offer their own credit cards which may prove to be a very useful instrument for building up your credit profile. If you want to go for a store card, you need to visit the departmental store and fill up an application form.
After your credit card application gets approved and you get a new credit card, you should make limited purchases with your card so that you can manage to repay it within the interest free due date, as these cards carry high interest charges. Moreover, paying off the debt within the due date will help you to maintain a good credit history. Not only that, since the “amounts owed” factor plays a vital role in your FICO scores, you should not spend more than 30% of your credit limit on your cards. The biggest drawback of these cards is that, these cards come with a low credit limit and you can use these cards only within the chain of the departmental store. However, quite recently, these departmental stores have tied up with banks like Citibank and American Express and started offering VISA or MasterCard co-branded cards, which will allow you to use these cards even outside these departmental stores. In addition to this, you can even take cash advances on these co-branded credit cards just like normal credit cards. You can also enjoy lower interest charges with these co-branded cards as compared to the ordinary departmental store cards.
These cards provide you with host of other facilities as well. You may earn reward points on your purchases with these cards. However, you should not engage yourself only in earning reward points, because you may end up with debts you are not able to repay. If you cannot repay your debts on time, it may get reflected in your report as delinquent account and may badly affect your score. You should only use these departmental store or co-branded cards for the purpose of building credit. Once you build up a good credit score, you may go for general credit cards.