5 Best Store Credit Cards & the Ones You Should Avoid
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed on this page are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer.
It seems like you can’t buy a pair of socks without being asked if you’d like to apply for a store credit card. And, unfortunately, that may be the worst possible moment to make an important financial decision. The fact is that some retail store cards can offer you pretty good value; while, others atrocious. Most fall somewhere in between.
How can you tell a good store card from a bad one? The best store cards will offer competitive rewards that are easy to redeem for strong value. The worst cards will have confusing rewards programs that might appear to be valuable, but aren’t really once you’ve dug through their terms and conditions.
To get you started, here are some examples of both the best, and the worst store credit cards.
: This card offers you 4 percent cash back on gas purchases, including those at Costco. You also earn 3 percent cash back at restaurants and on travel and 2 percent back from Costco purchases. You earn 1 percent cash back on all other purchases. Plus, there’s no annual fee for this card with your paid Costco membership.
: This card simply offers you 5 percent off all purchases, with no limits. You also get free two-day shipping and an extra 30 days to make returns. This card comes as a credit card or a debit card, but neither have an annual fee.
: If you’re an Prime member, then this card offers you 5 percent back on all Amazon.com and Whole Foods Market purchases. You also receive 2 percent back at restaurants, gas stations, and drugstores. There’s no annual fee for this card.
: This electronics retailer offers you 5 percent back in rewards on all purchases. It also features flexible financing offers, albeit at the expense of earning fewer rewards. You also earn 2 percent back in rewards on dining and grocery purchases, and 1 percent back in rewards on all other purchases where Visa is accepted. There’s no annual fee for this card.
: First, this card offers you 20 percent off of purchases you make the day you open your account, and the next day, up to $100. You also earn reward points wherever American Express is accepted. And by being a cardholder, you’ll get Star Passes that give you another 25 percent off on any day you choose. There’s no annual fee for this card.
: This card offers you an outstanding 10 percent back in rewards, far better than any other credit card you could use at their stores. You can see these savings at , , or PB Teen stores.
: You would think that anyone who loves video games would be able to figure out what points are worth, but the video game retailer seems to be betting that they can’t. This card offers you 5,000 to 15,000 points after your first purchase. This may sound like a lot of points, but they’re only worth a tenth of a cent each, just $5 to $15 total. Worse, you hardly earn any rewards for your spending, just 5,000 bonus points for every $250 spent. Throw in a sky-high 28.49 percent interest rate, and it’s game over for this card.
: Many of us would love to save money on groceries, but this card isn’t the way. It offers three times points per dollar spent at Kroger brand products purchased from stores, two times on all other Kroger purchases and one point per dollar spent elsewhere. This sounds decent, until you learn that points are only worth a half of a cent each as store credit towards future purchases. That means that you only earn a maximum of 1.5 percent rewards on some purchases, a mere 1 percent on store purchases and a pathetic 0.5 percent back when you use your card outside of Kroger stores. This, when there’s plenty of cards that offer 1.5 percent on all purchases, and as much as 6 percent back at any grocery store.
: This home products retailer offers you a card with a 29.99 percent APR and no rewards, not exactly a winning combination. Furthermore, its financing offer is a deferred interest plan, which only allows you to avoid interest when you pay off your balances within six months. Come a day late or a dollar short, and you have to pay all the interest charges on the entire amount, going back to the date of purchase.
: This high-end department store offers a store credit card with low-end rewards. You start with a 10 percent discount on same-day purchases, which is probably the only reason to consider this card. After that, you earn just two times the points on all purchases below $5,000. Points are worth just a penny each in store credit. Interest is 26.24 percent APR and rewards go up as you spend more. But I’d like to think that those who are throwing around tens of thousands of dollars at have access to much more competitive credit card offers.
: Here’s another store card with a good introductory offer, but a confusing rewards program that has little value. You get 10 percent off of your first purchase with the card. Then, it’s downhill from there. You earn 15 points per dollar spent at stores, but you have to redeem 2,500 points to give you a $10 reward. If you break out your calculator, you’ll find that you’d earn the $10 after spending $167 at American Eagle stores, which works out to a horrific 0.6 percent rewards. And if you’re foolish enough to use this card for other purchases, you’ll only earn five points per dollar, which will equate to a negligible 0.2 percent rewards. Just. Run. Away.