Improving your credit score is nearly impossible if you already have bad credit. Credit card companies are less likely to give you a credit card because you’re seen as too much of a risk. Because of this, your options for boosting your credit score are limited. Store cards are designed to help you boost your credit with no credit or employment check necessary, but there are some drawbacks to be aware of. Here’s how to determine whether or not a store card is right for you.
By: Heather Hanks Dec. 10, 2018
Store cards are similar to a credit card with some limited features. While a credit card encourages you to use it just about anywhere, a store card will only allow you to use it in certain stores. They usually have a credit limit, and you have to make monthly payments to use the card. Additionally, they tend to charge a higher APR, which can make them more expensive. You may occasionally get lucky and sign up during an exclusive time where some of these fees aren’t quite as high. But, in general, expect to pay more for a store card.
So why use it then? Store cards are a good option if you have no credit or bad credit. Some companies allow you a guaranteed credit limit, but you must already have an active credit or debit account to sign up. They do not require an employment or credit check and the application to get one is quick. They will accept you even if you have no credit or bad credit. Most importantly, store cards report to a major credit bureau, which is a great way to improve your credit score if you’ve been turned down by other credit lenders.
The top two store cards that can be used to improve your credit are Horizon Gold and Freedom Gold Cards. While they are not credit cards nor do they work like one, store cards are a good option if you’re satisfied with doing your shopping in one location. They tend to have higher fees, but it’s worth it if your goal is to sign on with a card that reports to a major credit reporting bureau and you have no other options for improving your credit score. Here is a breakdown of each.
The Horizon Gold Card is not a credit card, even though it looks like one. It’s a store card that you use at the Horizon Outlet online store, which is comparable to Wal-Mart. Your bill is to be paid in full every month, and your payment history is reported to one of the top three major credit reporting agencies for a chance to boost your credit score. This card requires a monthly payment of $24.95. Benefits of becoming a member include My Privacy Protection, My Universal RX, My Legal Assistance and roadside assistance.
The Freedom Gold Card is very similar to the Horizon Gold Card with many of the same features. Both cards have the same policies for their privacy protection, roadside assistance, and legal assistance plans. They also charge the same amount of monthly fees at $24.95, which equals almost $300 a year. Both cards do not require you to go through employment or credit checks beforehand, and they can only be used at the Horizon outlet online store. Unlike the Horizon Gold Card, there is a one-time sign-up fee of $5 on top of the monthly payments.
If you are not able to get a credit card, then a store card is a good way to improve your credit. Each card mentioned above reports your payment history to at least one of the three major credit reporting bureaus, which is an easy to way to improve your credit score if you don’t have good credit. The downside to both cards is that they are most expensive than a credit card with fees of up to $300 a year.
There are not many differences between the Horizon Gold Card and the Freedom Gold Card. They each allow you to sign up without a credit or employment check and give you a $500 credit limit, but you’ll need to do all your shopping at the Horizon online outlet store.
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