This article appeared in SoFi's On the Money newsletter. Not getting it? Sign up here.

OK, you’re holiday shopping and actually having some luck. You’ve hit a big box retailer, that popular cosmetic shop and your favorite department store, nailing gifts for half the people on your list.

There’s just one wrinkle: Every time you check out, the clerk offers you a big time discount, like 30% or 40% — but only if you open that store’s credit card. When you’re spending a hundred bucks or more, that’s serious money.

But is there a catch?

As tempting as the instant savings may be, think it through first.

1)    If you won’t be paying off the entire credit card bill when the statement comes, you probably want to skip it. The finance charges are likely to cancel out the discount, and the interest rates on store credit cards can be especially high, easily topping 30%.

2)    If having that card is going to tempt you to overspend, skip it. You can’t “save” money on purchases you weren’t planning to make in the first place.

3)    Applying for a new card can hurt your credit score, and a lower credit score can potentially make it more expensive to borrow money. Fortunately, one application usually lowers a score by less than 5 points (so not a ton on a scale that goes up to 850,) but it could be more damaging if you’re new to credit and/or don’t have many credit accounts. Applying for too many cards too quickly can also hurt your score.

So what?

Taking advantage of a credit card promotion isn’t necessarily a bad idea. The discount on a large transaction may be worth a modest ding to your credit score, especially if you regularly shop at that store and the card comes with other rewards or perks.

But it only makes sense if you can pay off your balance in full and on time. And if you haven’t borrowed much money or have a shorter credit history — maybe you’re young, rent your home, or have always used debit cards — it may make more sense to use a card you already have.

Related Reading

How New Credit Impacts Your Credit Score (myFICO)

Should You Open a Store Credit Card for the One-Time Discount? (NerdWallet)

Should I Have Multiple Credit Cards (Equifax)

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

OTM20261102SW