The holiday shopping season can impact your finances, as well as your credit score. There is plenty of information available for consumers on how to create and maintain an effective budget during the Christmas season. It is equally important for consumers to seek knowledge about how to preserve their credit score, which can be particularly vulnerable during the holiday season with department stores aggressively offering incentives for you to apply for their credit card.

Many retail stores will offer a discount on your purchase if you apply for their store credit card, while others may offer a reduced interest rate or a promotional gift. This may appear to be a simple, irrelevant decision; 20% off your first purchase, or no interest for 6 months, is worth the 10 minutes it takes to fill out the application - right? Before making that decision, you must carefully consider the pros and cons, and how it will impact your financial plan.


  1. Helps build or re-establish credit. Retail stores are known to be more lenient than major credit cards in their credit granting.
  2. Receive ongoing discount offers if you pay for your purchases with the retail store card.
  3. Acquire points to redeem for trips, cash-back, or other promotional items.


  1. Multiple credit applications in a short period of time will lower your credit score; and opening too many store cards too quickly will also hurt your credit score.
  2. Retail store cards typically charge higher interest rates. If you don’t plan to pay the balance within 30 days you will face some hefty interest charges.
  3. Retail stores typically issue cards with lower credit limits. This will negatively impact your total debt service ratio if you plan on carrying a balance.

Should you apply?

  1. Consider your 12 month plan. If in the next year you intend to apply for a loan or a mortgage, then submitting an application for a store credit card is not the right decision at this time. 
  2. If you normally pay your card off every month, and you regularly frequent the store, you could benefit from the store discounts.

Managing your credit score during the holidays could be as easy as not applying for credit that you don't need.

~ Charlie Peet ~


Definition of 'Total Debt Service Ratio - TDS'

A debt service measure that financial lenders use as a rule of thumb to give a preliminary assessment of whether a potential borrower is already in too much debt. More specifically, this ratio shows the proportion of gross income that is already spent on housing-related and other similar payments.
Receiving a ratio of less than 40% means that the potential borrower has an acceptable level of debt.