I signed up with a free store ecrater.com and I don't wether I should eventually pay for hosting or just redirect a domain? The store has everything thing I need except for traffic. DOes this fact make a difference in your placement.
I have heard that search engines penalize websites on free hosting. It's probably more that the free hosting companies get so many spammy websites. So perhaps some free hosts don't get penalized (see blogspot). In the long run, you are better off paying for your own hosting. You will face too many obstacles trying to optimize a free website. For example, try submitting your store to any website directory. 99% of them will reject you unless you have your own domain name.