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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.
For a high flat rate
Citi® Double Cash Card – 18 month BT offer
With the Citi® Double Cash Card – 18 month BT offer, 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.
Alternative pick: If you want a flat-rate card with the potential to earn more in the first year, consider the HSBC Cash Rewards Mastercard® credit card. It offers a 3% introductory cash-back rate on up to $10,000 in spending and an ongoing 1.5% cash back rewards rate on all purchases after that. The annual fee is $0.
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 Amazon.com. 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 – 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 an intro 0% intro APR for 14 months on purchases and balance transfers, and then the ongoing APR of 11.99% - 22.99% Variable APR. 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 everyday expenses
Blue Cash Everyday® Card from American Express
Your local supermarket, department store or gas station may offer branded store cards, but the Blue Cash Everyday® Card from American Express could work out better for you when it comes to your everyday spending. It earns 3% back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%), 2% back at U.S gas stations and select U.S. department stores, and 1% back on other purchases. Terms apply. There's even a welcome offer for new cardholders.
You'll get some breathing room on interest, as the card offers a 0% intro APR period. It’s a solid offer for a no-annual-fee card.
Alternative pick: The Blue Cash Preferred® Card from American Express, this card’s sibling, can offer an even higher rewards rate in these categories if you’re willing to pay a $95 annual fee.
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 every purchase, which is the industry gold 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 Deserve® Pro Mastercard might be an option. It offers generous rewards rates: 3% cash back on travel and entertainment, 2% cash back at restaurants and 2% back on all other purchases. The annual fee is $0. The card's bonus categories may not fit as well in terms of everyday retail spending, and like the Capital One QuicksilverOne Cash Rewards Credit Card, there is no 0% intro APR window.
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 REDcard™ 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 Amazon Prime Rewards Visa Signature Card, which offers potentially lucrative rewards not just at Amazon, but also at Whole Foods — and also at restaurants, gas stations and drugstores. That can make for a valuable everyday card, if you already pay annually to be a 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.
Information related to the Amazon Prime Rewards Visa Signature Card has been collected by NerdWallet and has not been reviewed or provided by the issuer of this card.