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Before You Get a Retail Credit Card, Consider Your Options

Store cards have improved, and many still offer discounts or deals. But a general card may be more rewarding long term.
Dec. 12, 2018
Credit Cards, Rewards Credit Cards
Get One of These Cards Instead of a Retail Card
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We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

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 – 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 a rich sign-up bonus, consider the HSBC Cash Rewards Mastercard® credit card. It offers a $150 Cash Back Intro Bonus for new HSBC Cash Rewards Mastercard® credit card customers who spend $2,500 or more in new, net card purchases during the first 3 months from credit card account opening. You’ll also earn unlimited 1.5% cash rewards on all purchases, plus a 10% anniversary bonus that pushes the card’s effective rewards rate to 1.65%. The annual fee is $0.

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 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: “Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.”

And if you’re looking to finance a large purchase, the card offers an intro 0% on Purchases and Balance Transfers for 14 months, and then the ongoing APR of 13.99% - 24.99% 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: Get a $150 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months. Terms Apply.

You’ll get some breathing room on interest, as the card offers a 0% intro APR period: 0% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 14.99% - 25.99% Variable APR. It’s a solid offer for an annual fee of $0.

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, 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.

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.