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Sears Credit Card: Is It Right for You?

Nov. 7, 2018
Credit Cards, Rewards Credit Cards
NerdWallet adheres to strict standards of editorial integrity to help you make decisions with confidence. Some of the products we feature are from partners. Here’s how we make money.
We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

If you shop at the same store frequently — once a month or more — it could potentially be worthwhile to get that store’s dedicated credit card, if its discounts and rewards are useful to you.

But even frequent Sears shoppers might want to skip the retail chain’s branded credit cards and opt instead for a general-purpose rewards card.

Here’s why, plus some other things to keep in mind about Sears credit cards.

» MORE: Will your store credit card survive the ‘retail apocalypse’?

What Sears credit cards are available?

Die-hard Sears fans have two choices:

Sears Mastercard®: You can use this card at any merchant that accepts Mastercard, and it earns Shop Your Way points. For the first year the account is open, you’ll earn 5% back in points on gas station purchases and 3% back in points on eligible restaurant and grocery store purchases. After the first $10,000 in combined gas, restaurant and grocery spending, you’ll drop back to a rewards rate of 1% back in points. You’ll also earn an unlimited 2% back in points at Sears and Kmart during the first year. After the first year, everything drops back to 1% in points.

Sears Card: This store credit card can be used only in Sears stores or at Sears.com, as well as at Kmart. It gives cardholders monthly deals and special offers in-store or online. It also grants access to cardmember events and coupons. If you have this card, you may also qualify for “special financing” on select purchases at Sears and Sears.com.

Neither card has an annual fee.

» MORE: Your store credit card wants to be your everyday card

Should you get a Sears credit card?

Both Sears credit card options suffer from the same afflictions as most store cards: high interest rates and restrictive rewards.

Let’s start with interest

With either card, the APR for purchases and balance transfers is 27.24% variable. That’s much higher than the average rate on credit card accounts that incur interest.

Worse, both cards’ “special interest” offers on select large purchases can end up costing you hundreds of dollars in interest. That’s because the interest in these promotions is not waived, as it is with true introductory 0% APR offers. Instead, it’s deferred.

When interest is waived for, say, 12 months, the card issuer doesn’t charge you any interest. After the 12-month period ends, the issuer can charge you interest going forward.

But when interest is deferred for 12 months, interest is accruing in the background. As long as you have the purchase fully paid off by the end of the 12 months, you’ll pay no interest. But if any of the balance is left over — even 50 cents — you’ll pay interest on the entire purchase going all the way back to the day you made it.

» MORE: How to choose a 0% APR credit card

Now for the rewards

For a period of time, the Sears Mastercard® can earn 5% back in points on gas purchases and 3% back in points at restaurants and grocery stores. On the surface, those rewards appear comparable with or even better than what’s offered by the most competitive store cards.

But those rates are only for the first year you have the card, and only up to the first $10,000 in combined gas, grocery and restaurant purchases through that promotional period. After that, you’re back to earning 1% back in points on everything.

And where can you redeem your rewards? Only through Sears, Kmart and the Shop Your Way program, of course.

Alternatives to a Sears credit card

There are a lot of options that might prove more rewarding than a Sears credit card.

» MORE: NerdWallet’s best rewards credit cards

For rich rewards

The Costco Anywhere Visa® Card by Citi is a competitive store-branded card. It has rewards rates that are high and ongoing, and they span a large swath of spending. Yes, you must redeem your rewards at Costco, but you can redeem them for cash at customer service if you like. You earn:

  • 4% back on eligible gas purchases, on up to $7,000 per year in spending.
  • 3% back on eligible restaurant and travel spending.
  • 2% back at Costco and Costco.com.
  • 1% back on all other purchases.

The card has an annual fee of $0 but requires a Costco membership, which costs at least $60 a year.

For 5% bonus categories

The Discover it® Cash Back gives you 5% cash back in rotating categories that you activate, up to $1,500 in spending per quarter, and 1% on all other purchases. (See current categories here.) Historically, department stores — including Sears — have been among the bonus categories. The annual fee is $0, and there’s a compelling bonus for new cardholders: 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.

For flat-rate cash back

If you don’t want to deal with a card that pays different rewards for different types of purchases at different times of year, a good flat-rate rewards card is your best bet. The Citi® Double Cash Card – 18 month BT offer is an excellent example. It earns 2% cash back on purchases — 1% when you make the purchase and 1% when you pay it off.

» MORE: NerdWallet’s best store credit cards

Information related to the Sears Card and Sears Mastercard® has been collected by NerdWallet and has not been reviewed or provided by the issuer of this card.