Are Store Credit Cards a Good Deal? -

Are Store Credit Cards a Good Deal?

Have you ever been tempted by a cashier’s offer to save 15% on your purchase by signing up for a store credit card? Many of us have, and it turns out a majority of people who have retail credit cards got them on impulse. Only a third of folks actually planned to apply for one.

Store credit cards aren’t always the best option out there. They often have higher interest rates and limited rewards. Plus, if it’s not a co-branded card, you can only use it at that specific store.

Are store credit cards a good idea? Not always. Here’s what you should consider before saying yes to one the next time you’re offered.

What Exactly Is a Store Credit Card?

Store Cards Alternatives

Stores provide two kinds of credit cards: store credit cards and co-branded credit cards. Store credit cards, also known as closed-loop cards, are only accepted at that specific store or group of stores.

On the other hand, co-branded cards, like Visa or Mastercard, can be used wherever those card networks are accepted, even though they might have a retailer’s logo on them.

Many stores provide two types of credit cards: store credit cards and co-branded credit cards. Take Amazon, for instance. They offer both a store card, which you can only use on Amazon’s website, and the Prime Visa card, which works wherever Visa cards are accepted.

Many popular hotel and airline credit cards are co-branded, meaning they’re linked with a specific company.

For example, the Delta SkyMiles® Gold American Express Card gives you rewards and benefits for Delta flights but can also be used wherever American Express is accepted.

If you’re unsure whether your card is a store card or co-branded, just check the logos on it. If you only see the store’s logo, it’s for that store only. But if you see both the store’s logo and logos like Visa, Mastercard, or American Express, it can be used anywhere those cards are accepted.

Differences Between Store Credit Cards and Regular Credit Cards

Besides where you can use them, the main difference between regular credit cards and store credit cards is their rewards programs.

Top credit cards today give you various rewards like cash back, points, and miles, and let you earn rewards on different types of purchases.

For example, travel cards might offer more rewards on things like flights and hotels. However, general-purpose cards don’t restrict your rewards to just one store.

When you have a retail card, whether it’s a store card or co-branded, the rewards you get usually come from the loyalty program of the retailer linked to the card.

Even if the card gives rewards for shopping elsewhere, you’ll typically get the best rewards for purchases made at that specific store. Plus, to get the most out of your rewards, you often have to use them with that particular brand.

Is It a Good Idea to Get a Store Credit Card?

Usually, store credit cards aren’t as beneficial as high-quality rewards credit cards or carefully selected co-branded cards. Even though store credit cards offer perks, their downsides can sometimes outweigh the points or savings you receive.

Store Credit Cards

When Is It Best to Steer Clear of Store Credit Cards?

  • If a retailer offers a co-branded credit card alongside a store card, go for the co-branded option. It’s usually the better choice because it can be used anywhere.
  • If you’re thinking of applying for a top rewards card, be cautious. Some credit card companies have rules about how many cards you can open in a certain timeframe. For example, Chase might reject your application if you’ve opened more than five cards in the last two years.
  • Don’t get a store credit card if you’re not sure you can pay off the full balance each month. Store cards often have high interest rates, so carrying a balance can be costly. Only apply for one if you’re confident you can pay it off in full regularly.

When Might It Be a Good Choice to Get a Store Credit Card?

  • If you need to boost your credit score fast: Store cards often have easier approval requirements than regular credit cards, so they can be helpful if you’re trying to build credit quickly.
  • If you’re a frequent shopper at that store: Applying for a store card just to save a little on one purchase might not be worth it. But if you regularly shop at a particular store, getting their credit card could make sense. Just be aware that carrying a balance on a store card can be expensive, so try to pay off your purchases promptly.

Store Cards Alternatives

If you’re looking for an alternative to a store credit card, it depends on what you want from the card – rewards, building credit, or in-store benefits.

For rewards at a specific store, consider getting a co-branded credit card like the Capital One Walmart Rewards® Mastercard® or a customizable rewards card like the Citi Custom Cash® Card, which offers 5% cash back on your top spending category.

If you need to build credit, think about getting a secured credit card like the Discover it® Secured Credit Card. With a secured card, you put down a deposit and use it to build up your credit history.

Instead of relying on store credit cards for in-store discounts, try using shopping apps like Rakuten, RetailMeNot, or Capital One Shopping. These apps offer coupons, discounts, and cash-back opportunities to help you save money at your favorite stores. You can also use Cashback Monitor to find the best rewards deals.


Store credit cards often offer rewards to reward your loyalty, making it tempting to get one from your favorite store to earn rewards on purchases you’d make anyway. But be careful, as these rewards may have limitations and the interest rates on these cards can be higher than you think. Before you apply for a store credit card, be sure to read all the details and understand what you’re getting into. Also, make sure you have at least one credit card that you can use anywhere you shop.

Leave a Comment