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Here is the 1 credit card you should almost always avoid

When you shop at retailers in-store or online, chances are you've been asked at checkout if you want to apply for a store card. They frequently come with tempting offers — sign up and get a huge discount on your purchase — but there are several drawbacks to consider before you apply.

CNBC Select spoke with two financial experts to get their take on store cards, what you should consider before applying and alternative credit cards to consider if you're looking to build credit.

What to watch out for with store cards

Store cards are notorious for having less than stellar terms. Low credit limits, high interest rates and limited usability are the biggest downsides, credit expert John Ulzheimer, formerly of FICO and Equifax, tells CNBC Select.

Low credit limits

A low credit limit is a red flag, because it doesn't really help your credit score, especially if you're using the majority of your credit limit. An important factor of your credit score is your credit utilization rate (CUR). This is the total amount of credit you're using (aka your balance) compared to your total credit limit.

For example, if a store card gives you a $300 credit limit and you have a $270 balance, you'll have a 90% CUR — which is very high. Financial experts generally recommend have a CUR below 30%.

High interest rates

Store cards typically have very high interest rates that can cause you to quickly rack up debt if you carry a balance month to month. The Bloomingdale's credit card has one of the highest APRs for a store card at 26.99% variable (see rates and fees). We recommend that you always pay your bill on time and in full in order to avoid high interest charges. Store discounts sound great, but it will be costly if you charge more to your card than you can afford to pay back by your due date.

Limited use

You can usually only use a store card at the issuing store, which can be a problem if you want (or need) to use credit other places. You'll need to have another credit card for purchases outside the issuing store, which may be a hassle if you only want one credit card.

However, some stores may provide the option to apply for a Visa, Mastercard or American Express backed card, which you can use anywhere those cards are accepted. These kinds of store cards usually offer low rewards, or no rewards at all, on purchases not made at the store, though there are some exceptions. For example, one of the better store branded cards is the Amazon Prime Rewards Visa Signature Card. It can be used anywhere Visa is accepted and offers 5% cash back at Amazon.com and Whole Foods, 2% back at restaurants, gas stations and drugstores; 1% back on all other purchases.

When is it OK to sign up for a store card?

While store cards have drawbacks, that doesn't mean they're a terrible option. Many big box retailers, such as Target, Amazon and Walmart offer store cards that can provide benefits to frequent consumers. If you're a responsible cardholder, you may want to take advantage of the benefits offered by store cards.

"If you do tend to shop regularly at a store, you might benefit from their loyalty program in the long run." Priya Malani, founder and CEO of Stash Wealth, tells CNBC Select.

The Target REDcard, for example, offers an instant 5% discount at checkout, which can add up to great savings on your Target runs. However, you need to be diligent about paying off your balance since the card has a high 24.90% variable APR (see rates and fees).

Discounts are great and all, but Malani cautions consumers to make sure they can afford their purchases: "If you can't pay the bill in full, the interest rate on the balance might actually negate the savings and leave you owing more than the cost of the purchase in the first place."

Alternatives to store cards

If you're looking to build or rebuild credit, a store card can seem enticing since they often come with more lenient credit score requirements, but both Malani and Ulzheimer recommend secured cards as an alternative to store cards. A secured card is nearly identical to an unsecured card in that you receive a credit limit, can incur interest charges and may even earn rewards, but you must make a security deposit in order to receive a line of credit. The security deposit typically becomes your credit limit.

The best secured cards have no annual fee and a smooth transition to an unsecured card. You can even earn rewards with select secured cards, such as the Discover it® Secured Card — earn 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter, then 1%); unlimited 1% cash back on all other purchases.

Once you improve your credit with a secured card, you can check out the best rewards cards, cash-back cards and travel cards, which frequently offer better long-term benefits than most store cards, including some money-saving shopping discounts.

Information about the Target REDcard, the Bloomingdale's Credit Card and the Amazon Prime Rewards Visa Signature Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the cards prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.