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Is a retail store credit card right for you? Here’s a basic rule that applies to all store credit cards: If you really like Store X, you might get value from the Store X Credit Card. But maybe not. Check out our card picks to learn more.
By Brendan Harkness
Store cards are relatively easy to get, but that doesn’t mean you should apply for them whenever you see an offer. Like other credit cards, they’re powerful financial tools that could have significant effects on your finances and your credit.
Consider the following points before applying.
A store card might be a good fit if you consistently spend a lot of money with a particular store — as long as the card offer is relatively good, of course.
When used responsibly, store cards will let you earn rewards, take advantage of benefits, and build your credit at the same time. Just be sure to never carry a balance and make all your monthly payments on time.
By Brendan Harkness
Some merchants provide their own co-branded store credit cards to entice shoppers with discounts when checking out, or with offers to pay over time. These cards are often instant approval, so you can use them immediately for that purchase. It can be tempting to save a few bucks, but are these cards really worth it?
Pros of Store Credit Cards
Cons of Store Credit Cards
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There are hundreds of retail credit cards, and we’ve only listed our best card picks for certain categories. If your favorite store isn’t listed above, it might still offer a credit card — check out its website or call to find out.
Here are a couple big collections, from the largest issuers of store credit cards:
Store credit cards can provide valuable cash back and benefits, but for the most part they’re only useful at their co-branded stores. For some more flexible card options, offering rewards for a variety of different purchases, check out our picks for the Best Rewards Credit Cards and Best Cash Back Credit Cards.
There is no “best” retail store card, just like there is no “best” store. A better question might be: What’s your favorite store, and does it offer a credit card?
But here are some of our favorite store credit cards, co-branded with big names that just about anyone could find useful:
Many store cards are limited in some ways, like where you can use them or how you can redeem rewards. And they typically have worse terms (like higher APRs) than the normal rewards cards you can get from big banks.
There are two basic types of store credit card, which are sometimes referred to as:
Open-loop cards are obviously more useful, because you can use them anywhere credit cards are accepted. But you might still find a closed-loop card useful if it has some features that you value highly.
Store credit cards are pretty much like any regular credit card, except for the open-loop and closed-loop distinction. You can usually apply for them either in-store or online. You don’t always need excellent credit scores— on the contrary, many store cards are attainable for people with average or even poor credit scores.
Retail store credit cards are actually a fairly good option for building your credit scores if you’re a huge fan of a certain store. But you should consider other options if you’re planning to carry a balance, as their interest rates can get pretty high.
If your card doesn’t provide good rewards at a particular store and you don’t have the store’s co-branded card, you may still be able to earn decent rewards in a less direct way. Use a credit card at a different store to buy a gift card for that first store, earning rewards on the gift card purchase instead. Then you can use that gift card to shop at the first store. But watch out, because some cards have terms that prevent you from earning rewards on gift cards.
In most cases, yes — just like any other credit card, a store credit card can typically help you build up your credit and improve your credit scores.
That’s because store cards usually report your card activity to the three major credit bureaus — Equifax, Experian, and TransUnion.
Many store cards are issued by Synchrony or Comenity, and both of those issuers report to all three major bureaus. If you’re not sure how a particular store card reports activity, you can contact the issuer to ask.
You can usually apply for store credit cards the same way you’d apply for any other credit card — just fill out the application online.
But in many cases, you can also apply for a store’s credit card in the store itself. Just ask an associate. Or, you might be offered (or pressured to get) a store card while you’re checking out, with the powerful lure of a one-time discount or coupon.
We typically recommend not applying for store credit cards as you check out, in large part because credit card decisions shouldn’t be made impulsively. Credit cards are significant financial tools, and you shouldn’t get one just to save a few bucks on a purchase.
Instead, take the time to consider your options, including general cash back cards and other store cards. Survey the vast selection of cards on the market, and consider getting one that works for you in a variety of ways — not just at one particular store.
But store cards in general are known for being relatively easy to qualify for, compared to typical rewards cards. So you may find that you qualify for store cards when others have denied you.
If you’re trying to establish a solid credit history or improve low credit scores, store cards aren’t your only options. We recommend checking out secured credit cards, which can be used pretty much anywhere. There are also unsecured cards designed for bad credit that can help.
For rates and fees of the American Express Cash Magnet® Card, please click here.
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The information related to Walmart Rewards Mastercard®, My Best Buy® Visa®, American Express Cash Magnet® Card, Capital One® Quicksilver® Cash Rewards Credit Card, Walmart Rewards Card, Discover it® Cash Back, Amazon Business Prime American Express Card, Amazon Business American Express Card, My Best Buy® Credit Card, Costco Anywhere Visa® Business Card by Citi, Shop Your Way Mastercard®, Kohl's Charge Card, Cabela's CLUB Mastercard®, SaksFirst Mastercard®, and The Home Depot Consumer Credit Card have been collected by Credit Card Insider and have not been reviewed or provided by the issuer or provider of these products.