Photo (cc) by IowaPolitics.com

Here’s a recent reader question – maybe you’ve wondered about it as well:

Lately I’ve received tempting offers on credit cards, one such was from Sam’s Club, at the time of our family’s last visit we were offered to save $40 on that days purchase if we signed up for a Sam’s card. My wife received a similar offer although I can’t remember from where. Of course we signed up for the Sam’s card and immediately paid the balance and closed the card. Our question is how does this procedure affect our credit score, if these offers continue in our favor is it a good idea to accept. As always thanks for the great info.

– Conley Family

The answer to your question, Conley Family, is that you probably should sign up for offers like this. But that doesn’t make it the right answer for everyone reading this. Because whether you should sign up for a store’s credit card in order to get a one-time discount depends on both who you are and your current circumstances. Here are 3 reasons why you shouldn’t take advantage of deals like the one you describe, and 3 you should.

Three reasons not to bite at store credit card offers

1. It could hurt your credit score.

Those who grant credit don’t like to see you applying for more – it makes them nervous, and causes your credit score to drop. Depending on the current strength of your credit history and score, the amount of the ding could be both minimal and temporary, but if you’re thinking of applying for a mortgage or other loan soon, don’t take chances. For example, according to this page of credit score developer Fair Isaac’s website, today a 760 credit score would qualify you for a 3.8 percent mortgage, while a 759 would only get you 4.2 percent. On a 30-year, $300,000 mortgage, that results in an extra $38 a month – for 360 months. Total cost of that $40 store store discount? $13,680.

To learn more about improving your credit score, check out this recent story: 3 Tips to Raise Your Credit Score – Fast.

2. It’s one more thing to worry about.

The more credit cards you carry around in your wallet, the greater your:

• Temptation to spend money you may not have.
• Hassle if your wallet gets stolen.
• Odds of an increasing inflow of junk mail.
• Chances of having your identity stolen.

In short, why do anything to make your already complicated life more stressful?

3. Department store cards stink.

I have no idea whether a Sam’s Club card offers decent interest rates, but many department store cards are among the worst – rates over 20% are the rule rather than the exception. If there’s even a chance that you’ll keep one of these cards and carry a balance on it, your one-day savings will quickly be eaten up by finance charges. Which is, of course, the precise reason that these promotional offers are made in the first place. Stores that offer 10 – 15 percent off that day’s purchases, or in the Conley’s case, $40 off, aren’t doing it for charity.

Three reasons to seize the savings

1. You’re not the person the store hopes you are.

Note what the reader above said regarding the way they dealt with the card they got from Sam’s Club: “Of course we signed up for the Sam’s card and immediately paid the balance and closed the card.”

This obviously isn’t what a department store is hoping for. If you have the discipline to pay the card off completely and close the account, why not take “free” money? I put quotes around the word “free” because it isn’t really free – you have to fill out an application, and closing the account requires writing a letter, not just cutting up a card, as well as following through to make sure the account is indeed closed. But if you’ve got the extra time – and aren’t immediately applying for a loan – why not pick up what they’re putting down?

2. You want the card anyway.

It’s ironic that the same person who may get turned down by one credit card company might get paid for accepting plastic from another. If you’re trying to build or rebuild your credit, here’s an opportunity to establish a new credit line and make a little money in the process.

You might also be a frequent shopper at that store and get other perks for being a “preferred customer”.

3. The amount of money is significant.

While in the Conley’s case the offer was a flat $40 for opening a store account, these offers are often for a percentage off that day’s purchases. If you walked into the department store to buy a $2,000 entertainment center, getting 15 percent off is $300 – that’s a lot of coin. Providing you’re not applying for a major loan in the near future, that’s not a bad return for the time you’ll invest in filling out the application and later closing the account.

Just be sure you’re only buying what you came in for and nothing else.

Got more money questions? Browse lots more Ask Stacy answers here.