Q: I just love a bargain! So when I go to make a big purchase, and RetailerX offers me a 10% discount if I apply for their store credit card, I have a hard time resisting, even though I really don't want any more credit cards. Should I do it?

A: Those offers certainly are tempting, but even if you pay them off immediately, cut them up, and never use them again, taking advantage of them might end up costing you in surprising ways.

It’s true that if you’re the type who pays off all your credit card balances on time each month and who isn’t prone to impulse buying, you probably won’t fall prey to the obvious risk of getting an additional card: the temptation to max out your new card and carry a costly balance.

Still, you should be aware that store cards often charge higher interest rates and steeper fees than your MasterCard or VISA, so if you’re late on a payment, it might be a lot more expensive than you would expect.

But perhaps the least obvious pitfall of accepting these offers is the impact it could have on your credit score and the effect that could have longer term on your personal finances. While the process by which your credit score is determined is not exactly straightforward, personal finance columnist Liz Pulliam Weston has recently written a book, Your Credit Score: How to Fix, Improve, and Protect the 3-Digit Number that Shapes Your Financial Future, that goes a long way towards demystifying the system, and she recommends that you “apply for credit sparingly.”

Liz explains that it helps to have a credit history when applying for credit, and that your first several accounts can help you to build that history. However, after a certain point, each additional time you apply for credit, you may actually reduce your score. Unfortunately, exactly when that happens is not divulged by Fair Isaac, leader in the credit-scoring industry. But, taken to an extreme or in conjunction with other credit issues, it’s possible that you could reduce your score to the point where lenders are no longer willing to give you the best terms on other loans, e.g. a car loan or mortgage. Now THAT could get costly!

But that’s not all. More and more, landlords and employers have begun using credit scores as part of their decision-making process. Further, insurance providers have identified a correlation between a person’s credit history and the probability that they will file a claim. Many are now using this information to determine which applicants to accept and how much to charge for coverage.

So, to sum up, if your credit history is stellar, the discount is high enough, and you aren’t going to be needing more credit any time soon, applying for RetailerX’s card in exchange for a 10% discount should be a fairly safe bet. Otherwise, you’re probably better off passing up this “bargain.”

p.s. If you’ve already accepted a lot of these offers and you’re wondering whether you should close the accounts, beware! Counterintuitive as it might seem, closing accounts doesn’t help your credit score, and may actually hurt it. For more information on improving your credit health, start with the articles on Liz’s Web site.