The holiday season is officially underway and along with the usual deals to get you in the door, stores are furiously promoting something else to shoppers: credit cards. Most of us reflexively decline these offers without a second thought, but with shrinking paychecks and rising prices meaning that our dollars don’t go as far, could opening a retail credit card be a smart way to save money during the holidays?

What is a retail credit card?

Retail credit cards, also known as store cards or co-branded cards, are revolving lines of credit that usually can only be used at a specific retailer. They offer perks like 5% back on store purchases, no-minimum free shipping, and an extended return window. However, they are also notorious for having low credit limits and astronomical APRs, which is a major source of their bad reputation.

That said, don’t write off retail cards as a scam. It’s absolutely possible to use them to your advantage during the holidays, and beyond, but you’ll have to be very strategic in order to avoid the pitfalls.

When to consider opening a retail credit card

You’ve already planned out all your gifts

Many retail credit cards offer one-time discounts on a purchase of around 10% or 20% as their big sign-up bonus. This can be a huge boon to someone making a major shopping haul; the larger the purchase, the greater the savings. Planners will benefit the most from this if they intend to knock out most of their shopping at a specific retailer in one swoop.

You’re buying a large ticket item

Many retailers like Amazon, Apple, and Best Buy allow their cardholders to spread out payments for large purchases (think $500 or up) without being charged interest, an ongoing card perk that can be used again and again. The tradeoff: these purchases usually don’t earn any reward points that they might have otherwise. Still, the value of not paying interest will likely far exceed whatever would’ve been earned in rewards. Pair this with the sign-up bonus and you stand to save a lot.

You understand the reward structure

Getting 3%, 4%, and 5% in rewards on every purchase may sound like a great deal, but these retail card rewards are often in the form of points rather than cashback. This means the earnings can only be used at that store and you never actually get any money back in your pocket. Additionally, many stores require you to have a certain number of points before they can be used. Sometimes these rewards expire. So unless you know you’ll spend enough at a retailer to get a reward, the card likely won’t be worth it.

You can pay off your credit card bill every single month

The ultimate deciding factor of whether a retail credit card is a good idea comes down to whether you are absolutely certain can always pay off the entire balance each month. Retail credit cards have the highest credit APRs, with rates often being upward of 20%. No matter how amazing the credit card perks are, any earned value will quickly be wiped out if you carry a balance – even just once! Plus, store cards are also known to heavily penalize late payments and may reduce credit limits or even close the card entirely without warning.

When is a retail card a bad idea?

If you are already struggling with credit card debt (or just have a habit of using your credit card impulsively), a retail card is likely just going to get you in trouble and outweigh any short-term perks. Retailers offer these cards with the goal of making money through interest charges and fees or encouraging shoppers to shop more frequently. But they can only make money off you when you don’t use the card wisely.

If responsible credit usage practices aren’t already deeply ingrained in you, a retail card is not a good choice for trying to develop those habits. Instead, opt for a low-interest credit card this shopping season. They’re not flashy or glamorous, but they’ll save you money in the long run if you’re relying on credit cards to finance your holiday spending.