Are STORE Credit Cards Worth It? (The TRUTH)

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There are 2 different types of store credit cards:

1. Standard ‘Store Credit Cards’ are closed loop, meaning they can only be used at 1 particular store, brand, or family of stores. They do no operate on the Visa, Mastercard, American Express, or Discover networks.

2. ‘Co-Branded Store Credit Cards’ are open loop. These DO run on the Visa, Mastercard, American Express, or Discover networks (look at which logo appears on the front or back), meaning they can be used anywhere those types of cards are accepted.

Some great examples of these 2 types are the Amazon credit cards. There are currently 4 personal versions: 2 Amazon Store Credit Cards that are closed loop and issued by Synchrony Bank and 2 regular Amazon Credit Cards that are open loop running on the Visa network and issued by Chase. Note: there’s also an Amazon Business Credit Card issued by Amex.

Compared to other credit cards, Store Credit Cards tend to have more limited rewards, offer signup bonuses that offer an immediate reward (e.g. 20% discount upon checkout), have higher APR rates, lower credit limits, and may have lower acceptance rates if they’re closed loop.

Store Credit Card PROS
– Easier to qualify & get approved
– Usually get an immediate discount upon opening
– May get strong ongoing rewards (3% – 5%) at a specific store
– Occasional bonus perks, like extra rewards, access to discounts, invite-only events, etc.

Store Credit Card CONS
– May have limited use (e.g. 1 store)
– Typically high interest rates
– Usually limited rewards
– May give lower credit limits
– May have limited / short-term value

Other ‘regular’ credit cards that offer excellent rewards for shopping include:
– U.S. Bank Shopper Cash Rewards Visa Signature
– U.S. Bank Altitude Reserve
– Amex Blue Cash Everyday

Are store credit cards worth it?

YES if

– The upfront discount is meaningful to you.
– You frequently shop at the store / brand.
– The ongoing rewards are valuable to you.
– You are building / rebuilding credit & are having difficulty getting approved for other cards.
– You get access to perks you couldn’t otherwise get.

NO if you

– Don’t value the discounts / rewards.
– Don’t shop at the store / brand frequently.
– Can get approved for other, higher-value cards.
– Prefer more flexible cash back rewards.
– Prefer travel rewards.

Examples of good store credit cards:
– Amazon Prime Visa
– Costco Anywhere Visa
– Capital One Walmart Rewards Card
– Lowe’s Advantage Card
– Target RedCard
– TJX Rewards credit card

Disclosure: The thoughts, opinions, and information presented are those of the creator. This site is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as CreditCards.com, YourBestCreditCards.com, and others. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. Mark Reese is not a financial advisor.

#creditcard #creditcards #storecreditcards

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