Analyzing Store Credit Card Offers

No matter where you shop, it seems as though the store has its own credit card.

And, to draw more shoppers to their cards, many of them are offering rewards programs that rival what you see from major card issuers.

Before you jump on the band wagon or succumb to the pitch of “saving 10% on your purchases today”, consider your options.  You want to make sure that you are getting the best rewards program for you.

Downsides to Store Credit Cards


Realize that there are some very real limitations to many store credit cards.

Many of these cards can only be used at a particular store.  That means that the card only really benefits you if you regularly shop at a specific retailer.

Keep this in mind; you don’t want to sign up for every card that you see.

Another consideration is that the hard inquiry into your credit standing will knock a few points off your credit score.  In other words, every time you apply for one of these cards there’s a check into your credit history.  If you plan to apply for a loan anytime soon, you want to watch out for that.  If you are teetering between excellent credit and good credit, applying for a store card can put you in a position where you are denied the best terms.

Also, realize that the interest rates charged by store cards are often higher.

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If you carry a balance, you will pay for it.  Dearly.

That could easily mean that you end up spending more on interest charges than you earn in rewards or discounts.  If you know you will carry a balance, a store credit card may not be the wisest choice.

Some stores offer special discounts only to card holders where you need to use your retail credit card in order to get the savings.  Wonder why?  It’s because the store doesn’t mind giving a discount if they think they can make up for it in interest charges.

Choose a Beneficial Store Card Rewards Program

shopping and store credit cards

Make sure you analyze store credit cards carefully before you sign up.

You’ll want to choose a store credit card that features a rewards program that offers you a great deal.

There are some programs that are worth considering.

The Target credit card offers you 5% off each purchase that you make in the store.  Those who use a Kohl’s credit card can take advantage of special sales and savings that are only offered to cardholders.  Walmart offers discounts on gas, as well as free monthly credit scores.  Pottery Barn Kids provides cash rewards amount to 10% of your purchases.

Other store credit cards might offer free shipping, returns without the need for receipts, and even offers for 0% financing.

Think about how often you shop at a particular store, and whether the rewards program would truly benefit you in the long run.

Will you see solid savings and rewards?  Would you shop at that store anyway?  If you know that you will shop regularly at a store, and the store provides decent rewards, it can be to your advantage to get a store credit card.

Finally

Just remember that savvy credit card habits apply to these types of cards, just as they do to cards for regular issuers.

Pay off your balance each month, and make sure that you only spend on planned purchases.  Integrate your store credit card into your current budget and credit card use plan.  As a result, you can improve your overall budget, and get more for your money.

What are your experiences with store credit cards?

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Published or updated August 7, 2012.

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