We’ve written recently about credit reports, credit scores, and how you can go about improving both.

These topics are on the minds of many Americans as they balance their gift lists with their bank accounts during the Christmas season. But buyers beware – those good sales that stores offer through their brand-name credit cards could leave your credit score hurting in the New Year.

You may be tempted this season to give in to the plea from that persistent sales clerk at one of the big retailers — “Are you sure you don’t want to save 15 percent today?” — and open up a couple of store-brand credit cards. […]

But before you start filling out the application, there are some things you need to know. If you carry a balance on store-brand cards, known in the industry as private-label cards, or if you miss a payment on your no-interest purchase, you can end up wiping out those initial savings, and then some. And when you open a new credit card, your credit score can suffer, too.

Store cards typically have less strict credit requirements than other major issuers, so signing up for one of these cards could help build credit. However, companies compensate for less strict credit requirement through higher interest rates, and there’s a large risk to your credit score if you miss a few payments.

Since most store cards have higher rates than most general-purpose cards, you do not want to fall behind. And if you do, you can do major damage to your credit score. Those with a FICO score of 780 — the scale ranges from 300 to 850 — who are 30 days or more overdue can lose 90 to 100 points from their scores […]

While main factors like “payment history” and “outstanding debt” comprise a majority of your credit score, remember that opening up new credit cards still accounts for approximately 10 percent of your credit score. This is why one of our credit score improvement tips is to slow down on opening new credit cards.

Everyone loves a good deal, especially over the holidays, but check the fine print – and your bank account – to make sure it’s actually a good deal you can afford.

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