Store credit cards (2019 guide): How they work, best cards

You'll find stellar rewards, plus benefits not offered by general cards.

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There are hundreds of store credit cards, and they can offer excellent rewards and unique benefits. Just consider whether you’ll get enough value from one, or whether a general card could be more useful.

Our pick for a store card with up to 5% off

Target REDcard™ Credit Card

  • $25 off a future qualifying purchase of $100 or more when approved
  • $0 annual fee
  • Save 5% on purchases at Target stores and Target.com
  • Early access to special events, products and promotions
  • 10% off coupon on your card anniversary
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Excellent store credit cards to start with

There are hundreds of store credit cards, and the “best” one depends on where you spend the most time and money. Ultimately, a store credit card isn’t any good if you can never use it.

If you need a place to start, consider cards from big-box retailers. These tend to be excellent picks, and they can be more flexible because you can usually buy more products with them.

Below, you’ll find our best picks for their respective retailers.

Amazon Prime Rewards Visa Signature Card

You’ll need an eligible Amazon Prime membership to apply for this card. However, you’ll earn a stellar 5% back at Amazon.com and Whole Foods. Plus, earn a solid 2% back at restaurants, gas stations and drugstores.

Target REDcard™ Credit Card

This card is very similar to the Amazon credit card, offering an excellent 5% off eligible purchases at Target and Target.com. One major difference: Amazon’s card requires a Prime membership, while Target’s doesn’t require any subscription.You’ll also receive free two-day shipping on eligible items at Target.com, which gives you an incentive to shop there rather than Amazon.

Note that this is a closed-loop card, so it’s valid only in the Target network.

Costco Anywhere Visa® Card by Citi

This card offers 2% cash back at Costco and Costco.com, which is solid. You’ll also find excellent rewards on gas, restaurant and eligible travel purchases.You’ll need a paid Costco membership to apply for this card.

My Best Buy® Visa® Card

With the My Best Buy® Visa® Card, you can choose between 5% back in rewards at Best Buy or deferred interest on eligible purchases at the retailer. The card is also surprisingly good for everyday purchases, offering 2% back on dining and grocery purchases and 3% back on gas for a limited time.

The card has no annual fee. But depending on your credit, you may receive the Gold version, which comes with a $59 annual fee.

With less-than-stellar credit, you might receive the My Best Buy® Visa® Card, which is a closed-loop card.

Walmart Rewards Mastercard

This recently updated Capital One offering comes in two versions: The Walmart Rewards Mastercard and the closed-loop Walmart Rewards card. The Walmart Rewards Mastercard is an open-loop product, valid in all stores, not just Walmart and Walmart-associated retailers. With that said, you’ll find your biggest rewards value when shopping at Walmart.com or in-store during the introductory period, a hearty 5% back on purchases. In-store purchases revert to 2% after the intro period. You’ll also earn a solid 2% back on restaurants and travel and 1% back everywhere else.

How we chose our best cards

The value of a store credit card is heavily dependent on where a consumer shops. Given this, we picked cards for our list based on which products were most effective for their respective retailers. We placed heavy value on the highest rewards rates. When appropriate, we considered cards with standout benefits.

What’s changed in 2019

The My Best Buy® Visa® Card currently offers 3% rewards on gas, which is an impressive rate.

Compare more store credit cards

If you want more options for store credit cards, consider the products below. Some of the cards may be good choices if you’re rebuilding credit, such as the Fingerhut FreshStart® Credit Account.

Name Product Filter values Annual fee Purchase APR Recommended minimum credit score
$0
24.65% variable
580
A no-annual-fee credit card and discounts when you shop at Target.
$0
29.99% fixed
300
Build your credit history with low monthly payments.
$0
29.99% fixed
300
Get access to purchase items in the Fingerhut store with no overlimit fees.
$0
5.75% to 25.99% fixed
300
Buy now, pay later — low monthly payments make shopping easier
$0
5.75% to 23.99% fixed
300
Buy now, pay later with payments as low as $20 a month.

Compare up to 4 providers

What are store credit cards?

These are credit cards issued by retailers, typically valid only in their respective store networks, much like in-store financing. They may offer benefits such as store-exclusive rewards and discounts.

Store credit cards are valid outside of their issuing retailers if they’re affiliated with major card networks, such as Visa or Mastercard.

Here’s an example of a store credit card

The Hot Topic Guest List Credit Card is one example. You can use it only for purchases at Hot Topic, and you’ll earn 1 point for every dollar you spend there. Each time you earn 100 points, you’ll earn a $5 credit you can apply toward Hot Topic purchases.

You’ll also receive store-specific perks such as shipping discounts, birthday offers and early access to sales.

Why get a store credit card?

  • You’re a loyal shopper at a certain retailer.
    If you can’t wait to spend money with your favorite retailer, a store credit card can reward you handsomely for your loyalty. Typically, you’ll earn stronger points or cash back than you would with other cards.For non-diehards, it might be better worth their time to shop with a general rewards card.
  • You want store-specific perks you won’t find with general credit cards.
    Store credit cards can offer powerful, unique perks you won’t find with a general card. These might include store discounts, special financing and exclusive access to events.
  • You want a credit card, but your credit score isn’t great.
    Store-card providers are often more willing to approve consumers with fair credit. This could be a viable way to get a card and start building credit.

Store credit cards: Closed-loop vs. open-loop

Before applying for a store credit card, know whether it’s closed-loop or open-loop.

  • Closed-loop means you can use the card only with the issuing store or its designated partners.
  • Open-loop means you can use the card anywhere that accepts its card network. For example, you might see a Visa logo on the card, meaning the card is valid anywhere Visa is accepted.

Store credit cards may come in both closed-loop and open-loop versions. Providers sometimes offer open-loop cards to consumers with better credit scores, and closed-loop cards to those with shakier credit.

What features will I find in store credit cards?

Benefits will vary by the store credit card, of which there are many. Here are a few features you may find:

  • Rewards.
    You may receive points for spending on your card. When evaluating a card, look at its rewards terms to check how many points you’ll earn for different spending. Depending on whether your card is closed-loop or open-loop, you could earn rewards only at a certain retailer or on all spending.When you accumulate enough points, you can redeem them for items such as rewards certificates.

You may need to dig deeper to find a store card’s reward structure

If you landed on the Forever 21 Credit Card‘s application page and wanted to know the rewards you’d receive, here’s what you’d do: Click on the link titled Rewards terms & conditions. A sidebar will pop up with this information:

Store credit cards: Forever 21 rewards example

You’ll see the card comes in two versions: the Forever 21 Credit Card and the Forever 21 Visa Card. Check the difference in rewards structures:

  • With both cards, you’ll earn 3x points at Forever 21 stores in the US, excluding US territories.
  • Only the Forever 21 Visa Card also offers 2x points at qualifying restaurants and 1x points on all other purchases.
  • Special financing.
    You may be able to pay no interest on certain items if you pay them off within a specified period. This is known as deferred interest. It could be a great deal, but be sure to pay off the entire purchase in time or it’ll collect interest for the entire period.Check your card’s terms and conditions to see what the normal APR is. It’ll often be higher than the average credit card APR of around 17%.
  • Shipping benefits.
    Use your card for online orders and you may receive free shipping and returns.
  • One-time bonus.
    You may receive some type of bonus for using your card for the first time, such as a discount.
  • Unique offers.
    Your card provider is likely to send you offers, such as discounts and birthday deals. You may also receive invitations to exclusive events.

How to compare store credit cards

There are countless retailers, and many of them offer their own store cards. Here’s how to decide whether it’s worth applying for one.

  • Annual fee.
    Many store cards don’t have annual fees, but some do. Before applying for a card, know what you’ll have to pay to get it.
  • Rewards.
    Check the rewards rate you’ll earn on store purchases. If the card is open-loop, you may earn bonus rewards for other categories too.One of the most important things to consider is whether you’ll regularly earn bonus rewards from the card. For example, a 5% rewards rate at the store might be great, but it won’t mean much if you never shop there. It might not be worth picking up the card just to earn more rewards once in a blue moon.
  • Other benefits.
    A store card can sometimes be worth picking up just because of its benefits. You might want access to free shipping, for example, or invitations to exclusive events. Carefully check a card’s benefits page to see if there are any can’t-miss features.
  • Special rules.
    Store credit cards can sometimes have more restrictions than general credit cards. You may, for example, need a store membership in order to apply for a card. And you’ll want to check whether a card is open-loop or closed-loop.With store cards, you often earn a rewards certificate only after you reach a certain number of points. Check what this threshold might be, and consider how easily you can reach it.

Watch your card’s APR

Store credit cards tend to have very high interest rates. That means it can be an especially poor choice to carry a balance on your card month to month.

While it may be tempting to pay off your purchases much later, we recommend clearing your balance in full each billing cycle. This will go a long way toward keeping you out of debt.

Alternatives to store credit cards

Store credit cards can be lucrative, but they may not always be the best choice. Sometimes, a general rewards credit card can be superior if it offers great rewards while giving you the flexibility to spend elsewhere.

If you’re not sure whether you’ll get enough value from a store credit card, consider a card that offers flat-rate rewards — that is, the same rewards rate on every purchase.

Here are a few of our favorites:

  • Citi® Double Cash Card.
    You’ll earn 1% cash back on all purchases, and another 1% as you pay them off. Not only is this card a great choice for store purchases, but it’s also excellent for other types of spending. Plus, you’ll pay no annual fee.
  • Capital One® Venture® Rewards Credit Card.
    If you prefer travel miles, try this card. While you’ll pay a $95 annual fee starting the second year, you’ll earn 2x miles on every purchase. You can redeem these miles for travel purchases, or transfer them to Capital One’s 15 travel partners for even more redemption flexibility.
  • Alliant Cashback Visa® Signature Credit Card.
    This card has a $99 annual fee starting the second year, so it’s best for those who spend enough to earn significant rewards. If that’s you, you’ll enjoy earning 3% cash back on all purchases your first card year and 2.5% cash back on all purchases after that.

Pros and cons of using store credit cards

Like any other product, there are advantages and disadvantages of store credit cards.

Pros

  • Rewards. Store credit cards reward you with points you can use to shave a few dollars off your next purchase.
  • Bonuses. Some store credit cards have sweeteners like gift certificates or bonus points on signup.
  • Shopping benefits. You may be eligible for exclusive extras such as special financing or free shipping.

Cons

  • Interest rates. Store credit card debts generally accrue interest at a higher rate than other credit cards.
  • Limitations. You may earn fewer points per dollar spent when you shop at a retailer not affiliated with the store card provider. Or you may not be able to use your card at all outside the affiliated store network.

Bottom line

Consider whether you spend enough with a retailer to justify picking up a store credit card. If you do, you can find excellent rewards rates. Also, consider store-card benefits, which can offer access to extras you won’t find elsewhere.

If you’re not sure a store credit card is the right choice, there are plenty of general rewards cards to choose from. A cashback card can be an especially good pick.

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