Best Store Credit Cards For Bad Credit Of August 2022 – Forbes Advisor

Credit cards can have serious consequences to your credit and financial health.

The two most common types of store cards are open- and closed-loop cards, otherwise known as in-network and out-of-network cards. Open-loop cards, sometimes called in-network or co-branded, will usually have a Visa, Mastercard, American Express or other major card issuer logo stamped on them and can be used anywhere the issuer’s cards are accepted. An out-of-network card, also known as a closed-loop or store-only card can only be used at the store associated with it.

Our list features both in-network cards and closed-loop cards and it’s important to know what type of card you’re applying for. There may be times where you apply for an open-loop card, but are offered a closed-loop card instead. This may happen because the bank does not feel that your credit qualifies for an open-loop card, but they do feel that you qualify for some credit.

Closed-loop cards normally impact credit and appear on credit reports in the same way in-network cards do. Many store cards behave the same way a credit card does, but not all do. Some cards offer “special financing” which involves fine print applicants should pay special attention to, as it often involves terms different from a standard credit card. No matter what the store card you want indicates about its interest, fees and other charges, be sure to read all the fine print until you fully understand what you’re getting yourself into.

To make the process easier, Forbes Advisor has created a number of guides to help consumers define terms, explore the inner workings of credit and understand how banks and other lenders advertise financial products:

Store cards have long held a reputation for gouging consumers with high interest rates and hidden fees, but store cards can also offer a way to unlock special financing on large purchases or earn rewards or discounts at a favorite store. Choose carefully — especially if you’re starting to build credit, as you’ll want to keep your first credit card account open as long as possible for the benefit account longevity will have on your score.

If you’re not convinced a store card is the best option — and you likely shouldn’t be, since store cards often have much higher rates and less favorable terms — consider instead a secured card or a student card, which may help rebuild credit without the high rates and hidden fees many store cards are infamous for.

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