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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.
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The information related to Walmart Rewards Mastercard, American Express Cash Magnet® Card, Walmart Rewards Card, Amazon Business Prime American Express Card, Amazon Business American Express Card, Kohl's Charge Card, Cabela's CLUB Mastercard, and SaksFirst Mastercard have been collected by Credit Card Insider and have not been reviewed or provided by the issuer or provider of these products.
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.
Fits your lifestyle: It should offer rewards and benefits with a merchant where you frequently shop.
Spending rewards: The best store credit cards provide rewards every time you make a purchase, rather than just giving you a one-time discount.
Valuable extra benefits: The better store cards offer merchant-specific benefits that shoppers will find useful over and over again, like free clothing alterations.
Good customer support: Many store cards are known for having poor customer service, but some, like cards from the major issuers, are generally better than others.
Easy way to build credit: Since store cards generally have lower credit requirements, you can use them to improve your credit if you can’t qualify for better cards.
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.
Is a Retail Store Card Right for You?
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?
That 5% off also applies to Starbucks stores in Targets, which is a pretty good deal for Starbucks compared to other cards. But take note that certain products and services won’t be eligible for the discount, like gift cards, prescriptions, and eye exams.
It provides the most cash back for online Walmart purchases, only giving 2% for in-store purchases. But if you plan out your spending a bit, and take advantage of Walmart’s free shipping offers, you can get a lot of mileage from this card.
5% cash back at Walmart.com, including the Walmart App and Walmart Grocery Pickup and Delivery
2% cash back for:
Walmart purchases in stores
Walmart and Murphy USA Fuel Stations
1% cash back everywhere else
Introductory Bonus Offer
5% cash back for using Walmart Pay in stores for the first 12 months; $50 cash back for spending $300 in the first 3 months
10% back in rewards on your first day of purchases, within 14 days of opening the account
We recommend going with the 5% (or 6%) reward rate, rather than taking the deferred financing offers, which can backfire if you don’t pay them off correctly. But if you really need extra time to pay for some electronics or furniture, they could be appealing; just be sure to follow the repayment terms.
You’ll only earn 1% back at Sam’s Club, but there are excellent reward rates for gas, dining, and travel. The broad appeal makes it handy for more than just wholesale clubs, giving you a card to use for other common purchases.
5% cash back for Gas in the U.S. and Puerto Rico, including gas at Sam’s Club (up to $6,000 spent per year)
3% cash back for:
1% cash back on all other purchases
$45 statement credit when you spend $45 or more at samsclub.com, the same day you open your account online
4% cash back on eligible gas worldwide, including gas at Costco (up to $7,000 spent annually)
3% cash back for:
Travel (including Costco Travel)
2% cash back on all other purchases from Costco and Costco.com
1% cash back on all other purchases
The 2% back at Costco is not too bad, but not exceptional either. This store card might be as or more useful for the other bonus categories; it’s actually one of the better cards for earning rewards on gas.
The Amazon Prime Rewards Visa Signature Card (Review) is an easy way to get 5% back for everything you buy on Amazon. Since Amazon has one of the broadest product ranges of any marketplace ever, this is probably the most versatile store card you can get.
It has no annual fee but requires an Amazon Prime membership, which currently costs $119 per year ($59 for an Amazon Prime Student membership). There are also a few interesting features you won’t usually get with store cards.
Department stores can be easy (but tempting) one-stop shopping trips. Most offer co-branded cards to help you get more out of every trip; JCPenney and the JCPenney Credit Card (Review) are no exception.
1X point per dollar spent at JCPenney
Introductory Bonus Offer
15% or 5% off select purchases on the day you open the card
Just 1X point per dollar, you might ask? Well, those points are worth 5 cents each, giving you a solid 5% cash back equivalent at JCPenney. And that could take a nice dent out of some clothes, pots and pans, or jewelry — whatever you might need.
Most wholesale club credit cards don’t offer very high rewards for the club in question, but the BJ’s Perks Elite™ Mastercard breaks that mold in a powerful way.
Not only do you earn 5% back at BJ’s, a nice discount on top of prices that are already pretty good, you’ll also get a significant discount on gas at BJ’s — a rare feature you won’t usually get with credit cards.
Save 10 cents per gallon on BJ’s gas
5% cash back for eligible purchases at BJ’s and BJs.com
You’ll earn 20X points per dollar at Express, which translates to an incredible 12% cash back equivalent for A-List credit cardholders. If you’re not on the A-List you’ll still wind up with an 8% cash back equivalent — still better than most competing clothing store cards.
20X points per dollar at Express, both in-store and online
Home improvement projects can be exciting, but they can also be cause for a headache. Get a little peace of mind with the Lowe’s Advantage Credit Card (Review), which can take a bite out of your project spending or give you some extra time to pay.
5% off OR
Special financing for purchases of $299 or more
Just be careful with the special financing offers. If you don’t pay off the balance in full by the end of the offer period, or miss a payment, you can be charged interest for the full balance. And that would be an extra headache you don’t need.
Time for a new couch? You may be able to adjust your budget up a bit if you go with the Pottery Barn Credit Card, because you’ll get 10% back in rewards on your eligible purchases.
10% back in rewards at Pottery Barn, Pottery Barn Bed and Bath, Pottery Barn Kids, and PBteen stores, catalogs, and online
Special financing for purchases of $750 or more
You could also choose special deferred-interest financing for big purchases, if you need some extra time to pay. But watch out, because you could be charged interest for the full purchase if you don’t repay the balance correctly.
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.
What Are the Best Store 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: These cards can be used anywhere, and have the Visa or Mastercard logo in the bottom-right (sometimes American Express or Discover).
Closed-loop cards:These cards can only be used with the co-branded merchant, and sometimes with its affiliates. There is no Visa or Mastercard logo.
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.
Do Store Credit Cards Build Credit?
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.
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.
Answer by: Rob Simon, Associate Professor of Practice in Marketing, University of Nebraska-Lincoln
There are three reasons for getting a retail store credit card. The first is if they offer a no interest credit card. This is very infrequent, but Von Maur in the Midwest offers one. This is a no brainer to get one of these cards if you like their merchandise.
The second is if you are trying to build up your credit history. These cards can be easier to get than major credit cards like visa and help build up credit history if you are new to the credit market.
The third is if there is a very significant offering for opening a new account with a certain company. For most companies a Retail Store credit card is just a co-branded card with Visa, etc so I would only get one in this situation if it is a highly significant offering.
Answer by: Yiyuan Ava Liu, Associate Professor, Business, Accounting, & Economics, Otterbein University, Ohio
Most department stores only offer loyalty programs if a customer opens their branded credit card. However, the recent trend is that more high-end department stores (such as Bloomingdales, Nordstrom) changed their rewards programs to include anyone (who has signed up by an email). Therefore, for consumers, what are the key considerations of getting a retail store credit card? You love shopping at this retail store! Either in store or online, you frequently buy from the store. In addition to the sign-up benefits such as introductory bonus offer, most rewards depend on how much you spend. For example, RedCard by Target offers card holders an 5% extra saving, free 2-day shipping, and 30 days extended return, while Walmart credit card offers an extra 3% saving and some related promotions. With other loyalty schemes such as consumer birthday gifts, direct cash back, instant coupons, free samples, merchant credit cards add value to the retail stores, especially for loyal and highly engaged customers. Customers who use store credit cards are more likely to shop in the same store than the alternative. Stores also tend to offer more special perks and discounts exclusively. Back to Bloomingdales example, store credit card holders still receive more points per dollar spent than non-credit card holders.
It is easy to get approved. Unlike other standard credit cards or premium credit cards with annual fees, store credit cards are used as a consumer sales promotion tool that encourages multiple purchases. That’s why they usually have lower credit rating requirements (with limited credits and higher interest rates too). Store cards may help you improve your credit scores if you use them appropriately.
It helps you shape your way of buying and saving. 2019 Experian Consumer Credit Review found that the average American has four credit card accounts. This indicates that it is wise to consider how each card can help you shape your spending habits. A mix of credit cards, such as travel rewards, cash back on select purchases, introductory 0% APR cards, and store card would be necessary to balance your spending and saving. Do some work before any financial decisions. Double check specific offerings such as sign-up benefits, ongoing discounts, special offers or perks, spending limitations, channel offerings (online and offline), and of course your own credit history.
Answer by: Rob Simon
Remember, you have to pay it back and these cards usually have very high interest rates. If possible, pay it back before any interest accrues. Also, each time you apply for or open a credit card it goes on to your credit report and opening numerous cards can lower your credit score.
Answer by: Yiyuan Ava Liu
More than 25% of rewards credit card holders carry a balance at least seven times each year, according to a 2018 survey from U.S. News. We advise not to carry a balance on your credit card so you can avoid interest charges. According to U.S. News card database, average APR of store credit cards range from 21% to 25%, and APR of rewards credit cards range from 16% to 23%. Good spending habits with specific attention to some key store or rewards credit card rules are essential to your personal finance management, includingstore reliability and trust, credit card management platforms such as websites and mobile apps, potential late payment fees, credit limits, interest rates, usage limits and rules (such as closed-loop or open-loop cards), frequent changes of offers and incentives, and resisting the temptation of one-time discount only.
Answer by: Rob Simon
Not very often. The only time you are offered one is at online or physical checkout. Again if it is a significant offering, you might consider applying for it, but read all the material on the application and apply after you have had time to review it.
Answer by: Rob Simon
I would not apply at checkout even though you might be offered a discount. I would take the time to review the material and if you like the offering I would apply at a later time. At checkout you are usually in a hurry and do not have time to really review the material.
Answer by: Yiyuan Ava Liu
Research from newmediaandmarketing.com shows that shoppers usually make impulse purchase decisions (such as getting a retail store credit card at checkout) when there was a sale or promotion (66%), they found a coupon (30%), or they simply wanted to pamper themselves (23%). When offered at checkout, consumers can get attracted by a good discount (e.g., 20% off for the purchases over the 2 days when opening a Macys’ credit card). Compared to impulse purchases, complex and expensive items are typically purchased only after the consumer has collected a large amount of information, which results in a planned purchase. Often, consumers will make a partially planned purchase when they know the product category and services they want to buy but wait until they get enough information. Again, be careful about the specific details mentioned above.
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