Departmental store credit cards: Cards that help you to build up a good credit score

Departmental store credit cards are a very important instrument to build up your credit history and therefore a good credit score. Most of the departmental stores in US like the Macy’s, Sears and Wall Mart now have their own credit cards which you can get even if you do not have a credit history or if you have a bad credit history. You can use these cards either to rebuild your damaged credit or to build up a new credit history. You can apply for a new card by just visiting the departmental store and filling up a form.

These departmental store credit cards provide you with a host of facilities, but you can use them only within the chain of the departmental store and not outside. You can use the departmental store credit cards and earn reward points which is as much as six points per dollar spend at the store. The most important thing which one might consider while applying for a departmental store credit card is that, these cards come with a very high rate of interest and low credit limit as compare to general credit cards. Again you do not have the option of cash withdrawals on such cards. However, most of these stores have now converted their cards into VISA or MasterCard co-branded credit cards through tie ups with banks like Citibank and American Express so that you can use them anywhere outside the store chain and can even take cash advances just like normal credit cards. Moreover, these co-branded cards have much lower interest rates as compared to ordinary departmental store credit cards.

Although it is true that the interest rates on these credit cards are high, it does not matter if you pay them off within the interest free grace period. You should spend on these cards upto the limit you think you can afford to pay back within the interest free period and save the interest payment. Moreover, you should not make any new purchases on these cards until your previous debts have been paid off in full. While applying for a departmental store card, you should also take note of the fact that most of these cards offer low introductory interest rates for a period of six months just as an incentive to make you purchase more on the cards. So you should not go by the introductory rates and should spend upto the limit you are able to repay so that you can make the card work to built up a good credit score for you and once you have built up a good credit score, you can apply for an ordinary credit card and start purchasing on the new card and build up a new credit history for that card.