Get our weekly newsletter for the latest in money news, credit card offers + more ways to save
If you’re trying to improve your credit, a store credit card may be helpful. While most store cards require fair credit scores, select providers may accept lower scores.
How to choose a store credit card for bad credit
Consider these factors when choosing a store credit card:
The affiliated retailer. Most likely, your store credit card will be valid only at its affiliated retailer. If you’re opening a card purely to improve your credit score, see whether there are small purchases you can make at the retailer.
Annual fee. Many store credit cards don’t have annual fees. Before applying for a card, however, check its pricing table to confirm its cost.
Interest rate. Interest is the charge you pay for borrowing money from your credit card provider. Store credit cards typically have very high APRs, especially for applicants with bad credit. Consider paying off your balance in full each month to avoid interest.
Repayment terms. Some bad-credit products have unusual repayment terms. Before applying for a product, check its terms and conditions to see how you can pay off the purchases you make.
Extra fees. Some providers may tack on extra fees you didn’t expect. To get a handle on what you might pay, dig into the card’s terms and pricing information. Know what you’re getting into before applying.
Compare store credit cards for bad credit
Pros and cons of store credit cards for bad credit
Store credit cards may be a great option if you have bad credit, but you might want to hit the brakes before applying. Weigh these pros and cons before settling on a store card.
Pros
More lenient approval requirements. Store-card providers are often willing to accept applicants with less-than-stellar credit. Keep in mind many store cards require at least fair scores of 580 to 669. Some providers are willing to approve applicants with lower scores, though these issuers are tougher to find.
Build your credit score. If your provider reports your payment history to the major credit bureaus, you could see an uptick in your credit score with consistent payments.
Cons
Limited uses for your card. Store credit cards — especially those open to applicants with damaged credit — are typically valid only at specific retailers. You can’t use them at different stores like you would with other credit cards.
High interest. Issuers charge steeper interest rates to account for the risk of lending to those with damaged credit. If possible, pay off your balance in full each month to avoid interest.
Is a store credit card for bad credit right for me?
A store credit card might be ideal if you already spend at the retailer that issues the card. Open a card only if you can make payments on time. Otherwise, you’ll take hits to your credit score.
If you’re not sure about a store credit card, consider these other methods to improve your credit score:
Open a secured credit card with no credit check. This can be superior to a store card in part because you can use it almost anywhere, instead of only at a specific retailer. On the downside, you must submit an upfront security deposit before you can open an account. For a no-credit check secured card, consider the OpenSky® Secured Visa® Credit Card, which consistently garners great reviews.
Take out a credit-builder loan. When you take out a credit-builder loan, the bank will put the money into a savings account. To access the money, make regular payments over 12 to 24 months and eventually pay off the entire loan.
Bottom line
Store credit cards may be an option if you have poor credit. However, many of them require at least fair credit scores of 580 and above. If you have bad credit, consider applying for one of the products we’ve listed in this article. Also, consider a no-credit-check secured credit card, which may be a superior option.
Frequently asked questions
Unfortunately, issuers will rarely tell you what credit scores you need for approval. Your best bet is knowing in advance which cards you have a decent chance of being approved for.
Each time you apply for a card, the issuer will likely initiate a hard pull on your credit. This means it’s checking your credit report to decide whether to accept you as a customer. Hard pulls typically lower your credit score temporarily by a few points, which can be bad news if you want to apply for other cards.
It’s best to allow for at least several months before seeing an improvement in your credit score. A big mistake people often make is expecting their scores to shoot up right away. Be patient and aim for the long term. With consistent, on-time payments, you’ll steadily see your credit score improve.
Kevin Joey Chen is a credit cards, banking and investments writer whose work and analysis have appeared on CNN, U.S. News & World Report, Business.com, Lifehacker and CreditCards.com. He's passionate about helping you get your finances in order by expertly navigating cutting-edge financial tools — including credit cards, apps and budgeting software.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.