Whether you’re at a department, specialty or other retail store, it’s not unusual for the checkout clerk to try to encourage you to open a store credit card. Usually they will mention a special discount on your purchase if you open a card today.

An additional discount may sound tempting, but here is what you need to know before you end up with a wallet full of store plastic:

1. The rate is a killer. According to CreditCards.com, the national average annual percentage rate for retailers’ credit cards is 23.23%, with some as high as 28.99%.1

If you carry a balance, a store card’s interest charges can easily wipe out any discount you’ve earned. For example, suppose you spend $500 and receive a 20% discount on your first purchase for opening a store card. That’s a savings of $100—not too shabby! But, if the APR is 23.23% and you pay only the $35 minimum monthly payment, you’ll cough up nearly $150 in interest over the 33 months it takes to pay off the balance.

2. You’ll need a bigger wallet. Unless it’s a co-branded card that carries the Visa®, Mastercard® or American Express® logo, you’ll only be able to use the card at the issuing retailer and its affiliated stores. If you shop at many different stores, you could end up carrying around 10 or more retail credit cards.

3. Your credit rating might take a hit. Chasing discounts and loyal customer awards by opening store credit cards with all of your favorite retailers means lots of checks on your credit rating. According to FICO, multiple credit inquiries could label you a higher credit risk and affect your credit score.2    

4. You may be at higher risk for fraud. Having multiple credit cards means more of your personal information is in the hands of retailers, putting you at greater risk of being compromised in a data breach. Moreover, with so many cards, you may not notice that one has been lost or stolen until fraudulent charges start showing up on your statement.

5. You could blow your budget. With one or two credit cards, it’s easy to keep track of your spending and manage your monthly payment. However, if you’re charging $50 here and $100 there on multiple cards, you could rack up overwhelming debt pretty quickly.

Play Your Cards Right

Store discounts and special offers may seem attractive, but they come at a cost. Instead, consider using one low-interest-rate credit card that is accepted almost everywhere to manage your spending. If you like being rewarded for purchases, consider a credit card that provides cash back or points you can use at more than just one place.

Navy Federal offers a number of credit card programs, including rewards cards—all featuring competitive rates to save you money.

1Source: The 2014 Retail Credit Card Survey, CreditCards.com2Source: MyFICO.com.