You’ve heard it before, “You can save 15% today by applying for a store credit card, would you like to do that?” Think Best Buy, Old Navy, etc… The benefit of this type of offer is, you got it, saving 15%.  It also helps establish credit if you’re looking for a point of entry that typically has lower standards than traditional cards. On the other hand, many times these come with even higher interest rates and lower limits than cards from financial institutions.  Furthermore, they may only be used in the chain that sponsors them.  Additionally, they can increase your temptation to spend.  If you’re dead set on that new 55-inch LED 4K Ultra HD Smart TV with High Dynamic Range, that will set you back $1,000.00 plus tax (plus the hanging bracket, add about $120), it might be worth opening a store credit card. Your original plan was to put it on your traditional credit card and pay it off over the course of –about– a year.  As you might guess, that comes at a price.  Your traditional credit card likely carries something near a 15.99% interest rate. And, you’re likely already carrying a balance on it.  Look at the table below, this can give you a good idea of the trade-offs between the cost on your traditional card versus a 24-month interest free store credit card, assuming this is your only charge:

TV plus accessories Purchase price Annual Interest Monthly Payment Months to Liquidate Total Paid Interest Paid
Traditional Card $1200 15.99% $100 14 $1,316 $116
Store Brand Card $1200 0% for 24 months $100 12 $1,200 $0

The only way to avoid paying interest every month on your traditional credit card is paying off the balance within the next billing cycle.  If you’re disciplined about your monthly payments, a store credit card with a zero percent offer can help YOU keep more of YOUR hard-earned money.