Black Friday has historically been one of the single largest shopping days in the country. The Day After Thanksgiving Sales of Black Friday are considered to be the "official" start of the Christmas holiday shopping season.
Black Friday is the day that retailers make a huge advertising push for the Christmas season. With this, comes the offer from any retialers to save an extra 10% on your entire purchase. To get the extra discount, you are typically required to open a new store credit card to receive that discount. Some electronics or home improvement retailers use their store credit cards to offer No Interest Financing instead of a percentage off discount.
While these can definitely save consumers money, most forget that opening a credit card will require an inquiry into their credit. Unlike mortgage shopping where each inquiry doesn't stand on its own, each credit inquiry for a new credit card does. Every credit card that you open does have a subsequent inquiry that will impact your credit score.
With interest rates being extremely credit score sensitive these days, most people cannot afford to lose any more points to their credit score than absolutely necessary. Once you drop below a 740 credit score, then your interest rate can be negatively impacted by your credit score.
For some borrowers, too much of a credit score drop means more then just a higher interest rate. If their credit score drops too low, some borrowers may find that they no longer qualify for a particular loan program. Others may have taken on too much debt to now be able to qualify for a mortgage.
If you are thinking about buying or new home or refinancing an existing mortgage within the next few months, then you may want to reconsider opening that new credit card just to save 10% that day. That 10% on your $100 is only $10 in savings. It's hardly worth the thousand on extra dollars that it could cost you on a mortgage.
Think twice before you open that new account.