Store credit card.

In plain English

A store credit card is a credit card branded by a single retailer (or its banking partner) that you typically can only use at that store or its family of brands. It is offered at checkout with a discount on that day's purchase as the hook. Store cards tend to carry higher interest rates than general-purpose cards and frequently come with 'deferred interest' financing, where interest is waived only if you pay the full balance before the promo period ends. Some store cards are 'co-branded' and work anywhere, but the classic store card is closed-loop and usable in one place.

01Why it matters

That 20-percent-off sign-up offer can cost far more than it saves if you carry a balance, because the APR is steep and deferred interest can hit you for the entire promo period at once.

02The math, step by step

You open a store card for 15 percent off a $1,000 couch, saving $150. The card offers 12 months 'no interest if paid in full.' You pay it down to $50 by month 12 but miss the payoff. With deferred interest, you owe interest on the original $1,000 for all 12 months, not on the $50 that was left. At the card's high APR, set by the issuer and shown in your cardholder agreement, that retroactive interest can easily erase the $150 you saved.

03What this is NOT

04Receipts

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