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Chapter 11. CREDIT REPORTS > Retail Credit Cards

Retail Credit Cards

It is not uncommon when you are shopping at a particular retail store, such as Sears, to be told that if you sign up for their own credit card, you can get an immediate discount of usually around ten percent on your purchase. What could be the harm in doing so? Anytime you open a new account, a credit inquiry is added to your credit report. Because credit inquiries can lower your credit score that simple transaction could contribute to a lower credit score that in turn could contribute to a higher mortgage rate. In addition, adding another credit card to your stable of credit cards lowers the average age of your credit history, which lowers your overall credit score. So if you are going to use that card on a regular basis, it may make sense to open a retail credit card account, but if the retailer accepts the credit cards that you already have, the advantage of having a store credit card may be minimal at best.


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