Before You Get a Retail Credit Card, Consider Your Options

Store credit cards can be tempting. Many offer immediate upfront discounts, as well as financing deals for large purchases such as appliances, electronics or home improvement supplies. Applying can feel like a slam dunk.

But store credit cards aren't always a good deal. The credit limits are lower than most other cards, so it’s easy to use a big percentage of your available credit during a routine shopping trip, which can bring your credit scores down. Their APRs tend to be higher, as well, meaning they can get expensive if you carry a balance month to month. Plus, the benefits are almost always confined to one store.

Looking beyond the big box might yield you a better bargain in the long run. Here are some of our favorite options for retail shoppers.

» MORE: NerdWallet's best rewards credit cards

For a high flat rate

Citi Double Cash® Card

With the Citi Double Cash® Card, your rewards aren't limited to a single store that you visit only occasionally, or a single spending category that you rarely take advantage of. The card offers a high flat rate on all purchases, in the most flexible form of rewards: cash back. You'll earn 2% back on everything: 1% when you buy, and 1% when you pay it back. The annual fee is $0. Bonus offer: Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.

Alternative pick: The $0-annual-fee Wells Fargo Active Cash® Card also earns 2% cash back on all purchases. On top of that, it features a rich welcome offer: Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.

For optimizers

Discover it® Cash Back

If you're willing to keep track of bonus categories, you can earn an even higher rewards rate with the Discover it® Cash Back. It offers 5% cash back in rotating quarterly bonus categories that you activate (up to $1,500 spent per quarter). Those categories have in recent years included grocery stores, restaurants, gas stations and home improvement stores. You'll also get 1% cash back on all your other purchases. The card also offers a unique bonus that the issuer phrases this way: "INTRO OFFER: Unlimited Cashback Match for all new cardmembers – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300."

And if you're looking to finance a large purchase, the card offers a 0% intro APR for 15 months on purchases and balance transfers, and then the ongoing APR of 18.49%-27.49% Variable APR. *Rates as of December 12, 2024. The annual fee is $0.

Alternative pick: For credit cards with a similar rewards structure, also consider the Chase Freedom® and the U.S. Bank Cash+® Visa Signature® Card. The latter even lets you choose your bonus categories from a list of several each quarter.

For average credit

Capital One QuicksilverOne Cash Rewards Credit Card

Rewards credit cards generally require good to excellent credit, but those with average credit could consider the Capital One QuicksilverOne Cash Rewards Credit Card. It earns an unlimited 1.5% cash back on purchases, which is the industry standard. The main drawback is that the card has an annual fee of $39, so you’ll want to make sure you can earn enough in rewards to outweigh the cost of carrying the card. The card also offers no 0% introductory APR period, so it's not ideal for financing large retail purchases over time.

Alternative pick: If you have a thin credit history and want to avoid paying an annual fee, the $0-annual-fee Upgrade Cash Rewards Visa® might be an option. It, too, earns 1.5% cash back on all purchases, although that cash back is automatically applied toward your next month's balance — meaning that you can't "bank" rewards for a larger redemption later.

Weigh your options

It's not that retail store cards are all bad. Many have stepped up their overall value in recent years, and some can be quite rewarding, especially for brand loyalists.

The Target Circle™ Credit Card, for example, offers a 5% discount on a majority of Target purchases, both in store and online. Depending on how much Target shopping you do, a 5% discount on nearly anything at that store may beat a card that offers 1.5% back on all purchases everywhere. It largely depends on your budget. The annual fee is $0.

A similar case can be made for the Prime Visa, which offers potentially lucrative rewards not just at Amazon, but also at Whole Foods — and also at restaurants, gas stations and transit. That can make for a valuable everyday card, if you already pay annually to be an Amazon Prime member.

But when you're considering your options, compare more than just the rewards rate or any upfront discounts on merchandise. Does the card also offer a sign-up bonus or a 0% intro APR period? (If it advertises "special financing," be sure that's not actually deferred interest.)

And possibly most important, are the ongoing rewards categories compatible with your everyday spending? If not, a general rewards card may be worth exploring.