Big-ticket shopping can be tempting — especially when the cashier offers you an extra 15–20% off today’s purchase if you sign up for a retail store credit card. For some shoppers, that instant discount feels like a no-brainer.
But what happens after you walk away with your new account? Some people never touch the card again, others use it occasionally and responsibly, and some fall into the trap of high interest rates and revolving balances.
At CreditVana, we believe it’s important to understand how retail store cards impact your credit and when closing them makes sense.
The Hidden Costs of Retail Credit Cards
Retail cards often come with subprime-style terms:
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High APRs: Interest rates often climb above 20%.
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Low credit limits: Sometimes just a few hundred dollars.
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Credit score risks: Using a large portion of a small limit can hurt your credit utilization ratio.
For issuers, the real profits come when shoppers carry balances — often wiping out any savings from that initial discount.
Should You Close a Retail Card? Three Approaches
1. Close the Card Immediately
If you opened the card just for the discount and don’t plan to use it again, you might be tempted to close it right away. That’s fine, but be aware:
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The credit inquiry from your application stays on your report for up to 12 months.
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The new account will likely remain visible on your credit report for up to a decade.
Closing the card doesn’t erase those effects.
2. Close the Card Eventually (or Not at All)
Some experts argue that if you’re not going to close it immediately, it may be smarter to keep it open long-term. Here’s why:
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Most retail cards don’t charge annual fees, so holding them costs you nothing.
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Even a small unused credit limit can help your credit score by lowering your overall utilization.
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Closing the card removes that unused limit, which could increase your utilization ratio.
A common myth is that closing a credit card erases its history. That’s false. According to FICO, the age of your account counts whether it’s open or closed.
3. Never Close the Card
If you keep the card open indefinitely and avoid carrying a balance, you benefit in two ways:
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Credit utilization: That unused credit limit helps your scores.
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Credit history length: Open accounts continue to age on your report, strengthening your profile.
Closed accounts typically remain on your credit report for about 10 years, but keeping a card open means it can keep working in your favor for much longer.
CreditVana’s Take
Retail credit cards can either:
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Provide a short-term discount with long-term costs, or
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Boost your credit profile if managed wisely.
The best strategy? Avoid carrying balances and only open retail cards if you’re confident you’ll use them responsibly.
👉 Want to see how retail cards are affecting your score? Get your free credit score and monitoring with CreditVana today.
