How Safe Are Store Credit Cards?

Customers are often offered store credit cards whenever the opportunity presents itself. Employers are given generous bonuses based on the numbers of store cards they sell. These cards always sound really rewarding, especially with the amount of discounts supposedly promised. These cards are not always what they seem, and here are some potential risks to be aware of:

High interest rates: Store credit cards often have high interest rates, regardless of potential credit risk. Macy’s has a flat interest rate of 24.5% and such high interest rates are typical because credit card companies give a lot of money to retailers. These companies have to make it back by charging a high interest rate to everyone that uses the card regardless of their credit score.
A close look at your credit score: A credit inquiry is typically done whenever you apply for a credit card at a store. This inquiry can potentially have negative effects if you plan to apply for a mortgage or car loan in the near future. Depending on the credit inquiry, it can take as much as 5 points off your credit score.
Few out-of-store rewards: Most store credit cards offer little to no rewards outside the store. Target for instance offers a 5% discount on all purchases at Target but not much outside.