Nick's 2 Cents...Store Credit Cards

Many retail stores offer savings if you sign up for a store credit card. However, financial consultants recommend using caution when using store cards. Financial consultant Jim Shoemaker says it is very easy to get in over your head.

"Credit card spenders usually spend a 110 to 112 percent of their paycheck," he says.

But, what if you can save money by using a credit card? It's possible if you sign up for a department store credit card. Many stores offer a savings, like an additional 10%, when you sign up. It's certainly tempting, but Shoemaker says stop and think before doing this.

"They're high interest rates most of the time from a department, store so be careful," he says.

Interest rates can be as high at 17% to 22%. Shoemaker says if you do the minimum payments on a card with 20% interest, you'll never pay it off.

Some stores also offer reward programs, where you get points for every dollar you charge. This sounds great in theory, but sometimes you need to charge $1,000 to earn a $15 or $20 certificate.

"If you're not disciplined don't do it," Shoemaker says. "Cut 'em up, melt 'em, put them in the oven, let it go to 400-degrees and watch 'em go. Man that's fun to do. Just don't use them if you're not disciplined."

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