Deal? Or No Deal?

Bonanza! Your new fall wardrobe, all in one store! Grand total: $1,000. Ouch. As you pull out your wallet, the sales clerk pitches you on the store credit card: "It'll save you 10 percent. That's $100." Deal?

NO DEAL! Store credit cards generally charge rates over 20 percent. So if you carry a balance, your finance charges will quickly wipe out the $100 you saved.

Say the card charges 21 percent and you make the minimum payment of 4 percent each month. In six months you'll have paid $99.28 in interest.

Put your new outfits on a regular bank card with a 10 percent rate, and you'll pay only $46.20 in interest.

But there's another reason to shun a new store card: Every credit application will ding your credit score, and applying for multiple cards over a few months can really cut into your rating.

That said, it's probably okay to do this once or twice in a lifetime. Simply keep the card for a while, use it occasionally and pay promptly; you may be able to undo the damage.

Why Even Good Behavior Can Hurt Your Credit Score

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