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Shopping credit cards

Many department and online stores offer loyalty programs and rewards programs tied to a credit card offer.

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Adrienne Fuller
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A number of retailers offer credit cards to patrons to reward customer loyalty. These store credit allow you to pay for purchases and earn rewards points you can use for in-store discounts or travel rewards. However, store credit cards can sometimes come with high-interest rates and have proven to be an expensive way to shop if used improperly. Here we compare some of the store credit cards available to help you pick the one for you.

What are the features of a store credit card?

Store credit cards work like regular credit cards. These main features are common among store credit cards:

    • Rewards. You get rewarded with points for every rupiah you spend at certain retailers. Rewards points can be redeemed for discounts on certain items, goods and travel rewards.
    • Interest-free. Some store credit cards offer interest-free terms when you sign up. These offers allow you to buy now and pay later; however, a high rate of interest can be charged when the promotional offer expires. Store credit cards may also offer interest-free days on purchases if you pay your balance in full each month.
    • Interest charges. Ongoing rates of interest can be higher than what is charged on other products. Be sure to compare all credit card types before you apply so you can find the credit card that is right for you.
    • Annual fee. An annual fee may be charged by the card issuer when you apply for a store card.
    • Balance transfers. If you need to consolidate debt, a store credit card that comes with a promotional balance transfer offer could be of interest.

Pros and cons of using a store credit card

If you want a credit card that is issued by a particular store, you can probably acquire one with little effort. You can apply at the store directly. These cards are a good choice for people who have little to no credit.

What value can branded store cards provide?

Branded store cards are a good choice because they have great rewards programs. If you shop often, you are given perks such as free gifts or discounts on merchandise and take advantage of many more deals.

The drawback to these store credit cards is that you may be charged a significantly higher interest rate. While it is easier to get the cards, this means that it is a higher risk to the merchant resulting in higher rates to the consumer. You will have to weigh your options to see if this card is worth the benefits.

One disadvantage is that you are limited only to the items that are available in the store. The rewards generally don’t often extend to other retailers. And, if you don’t shop a lot at these stores, it may not be worth your while. You will have to determine what kind of shopper you are and if the rewards program and benefits will be enough for you to want to join.

Pros

  • Rewards. Store credit cards reward you with points you can use to shave a few rupiah off your next shop or purchase.
  • Bonuses. Some store credit cards have sweeteners like gift vouchers or bonus point on signup.
  • Shopping benefits. You may be eligible for exclusive extras like interest-free finance and free shipping or gift wrapping when you use your store credit card to make a purchase at participating retailers.

Cons

  • Interest rates. Store credit card debts generally accrue interest at a higher rate than other credit cards.
  • Limitations. You may earn less points per dollar spent when you shop at a retailer not affiliated with the store card provider.

How to apply for a store credit card

Each store credit card has a list of eligibility requirements, but some of the general requirements you can expect include:

  • Aged 21 years or older
  • Indonesians, permanent residents and foreigners with valid work permit
  • Meet a certain minimum annual income

You may also be asked to provide the following information:

  • Identification ((such as a photocopy of KTP or passport)
  • Details of your income, assets, expenses and liabilities

You can find the specific eligibility requirements for each card by referring to our card reviews.

A credit card from your favourite retailer can seem like a good way to cash in on your purchases. As there are many available on the market, your ideal bet is to consider your spending habits and compare your options before applying.

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What is a department store card?

These were cards that were specific to the store and could only be used there. These cards were limiting, however, as you could only use them at the particular merchants offering such a card. Slowly credit cards began to replace this type of department store credit card, though there are still a few that remain.

Now, many of these same merchants offer what is called a branded credit card. These cards are tied to a particular store and offer perks to those who choose to carry their card. The processor of the card is usually Visa or Mastercard with the logo of the merchant displayed on it.

These cards, however, are not officially given by the store. It may have their logo on the card but the account is managed by another bank. This bank will set the credit limit, handle administration of the account, and handle default cases. The bank will take a share of the profits from the store.

Rewards credit cards

How do credit providers make money out of store credit cards?

When you use your credit card, the store is paid a certain amount by the credit provider, but first the credit provider takes a commission before paying the money to the store. Interest charges are also levied by the bank from its credit card owner for the debt they have as well as fines and penalties imposed on the credit card such as late payment fees.

Frequently asked questions about shopping cards

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