Advertiser Disclosure

Looking at Store Credit Cards? You’ll Likely Get More Value Out of These Cards

Credit Cards, Rewards Credit Cards
With so many websites offering free financial tools, it can be hard to know whom to trust. At NerdWallet, we thoroughly research financial products and companies, and adhere to strict standards of editorial integrity to find you the best choices. We even share how we make money so you can rely on our expert advice and recommendations with clarity and confidence.
Looking at Store Credit Cards? You'll Likely Get More Value Out of These Cards

Perhaps you’ve been shopping at the same store for years. You know where everything is, its prices fit your budget, and it carries the products you want.

When the cashier offers you a store credit card application, you might think, why not?

But in most cases, store credit cards are a better deal for the store than they are for the customer. Store cards tend to have:

  1. Low credit limits. One big shopping trip can bring you close to maxing out the card. That’s not good for your credit score.
  2. High interest rates. Carrying a balance in a high-interest card makes every purchase much more expensive.
  3. Limited usefulness. Most store cards can be used only at one store, or maybe a handful of affiliated retailers.

In most cases, a regular rewards credit card is a better overall value than a store card. You’ll almost always get a higher credit limit and a lower interest rate. Better yet, you earn rewards everywhere you shop. Try these great cards for shoppers.

5% cash-back bonus categories

It’s pretty hard to beat the Discover it® - Cashback Match™ if you like to shop. This card pays 5% back on up to $1,500 in spending per quarter in a series of bonus categories and 1% back on all other purchases. The annual fee is $0. This card is especially useful during the holidays, since fourth-quarter bonus categories have historically included Amazon.com and department stores — perfect places to buy gifts. Most department store cards can’t hold a candle to the introductory APR of the Discover it® - Cashback Match™: 0% on Purchases and Balance Transfers for 14 months, and then the ongoing APR of 13.24% - 24.24% Variable APR. Here are the current bonus categories:

Discover bonus categories for late 2017 and 2018
Q4 2017 (Oct. 1 – Dec. 31)Amazon.com and Target
Q1 2018 (Jan. 1 – March 31)Gas stations and wholesale clubs
Q2 2018 (April 1 – June 30)Grocery stores
Q3 2018 (July 1 – Sept. 30)Restaurants
Q4 2018 (Oct. 1 – Dec. 31)Amazon.com and wholesale clubs

Tip: The Discover it® - Cashback Match™ works well when paired with another great rotating bonus category card, the Chase Freedom®. Strategic shopping allows you to maximize both cards’ bonus categories.

High rewards at the supermarket

Many of the things you buy are one-time or occasional purchases. But you have to eat every day. If you spend a lot at the supermarket, the Blue Cash Preferred® Card from American Express is a great addition to almost any wallet. It pays 6% rewards on up to $6,000 per year in purchases at U.S. supermarkets. A family of foodies might exceed that spending limit, but you’ll still get 1% back at the supermarket once past the limit. The card also pays 3% back at U.S. gas stations and select U.S. department stores. It has an annual fee of $95. You’ll offset the annual fee if you spend just $31 a week at the supermarket. This card also offers a sign-up bonus that could make a sizable dent in your shopping bills: $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months. Terms Apply.

A flat-rate cash-back card

If you don’t want to mess with bonus categories or using different cards for different types of purchases, a flat-rate card is a good way to keep things simple. The Fidelity® Rewards Visa Signature® Card pays 2% back on every purchase, with no limits. The only catch is that your rewards must be deposited into a Fidelity Investments account. If you don’t have one, a good alternative is the Citi® Double Cash Card – 18 month BT offer, which pays a flat 1% on all purchases and another 1% when you pay those purchases off.

A great travel credit card

The Chase Sapphire Preferred® Card is well-loved because of its generous sign-up bonus and high rewards rate — especially on travel and dining purchases. Many people eat at restaurants more often than they shop at one specific store, so a card that offers great rewards on restaurant purchases may have more day-to-day value than a store card. You’ll earn 2 points per $1 spent on travel and dining purchases, and 1 point per dollar on everything else. Points are worth 1.25 cents apiece when redeemed for travel through Chase Ultimate Rewards. That translates to a high 2.5% rewards rate every time you go out for a bite to eat. The annual fee is $0 for the first year, then $95.

Tip: To earn a flat 2 miles per $1 spent on everything, take a look at the Capital One® Venture® Rewards Credit Card. Its miles can be redeemed for credit against any travel purchase at a rate of 1 cent per mile.

Great rewards for average credit

Store cards are sometimes more forgiving if your credit isn’t perfect. But the Capital One® QuicksilverOne® Cash Rewards Credit Card is available to people with average credit, defined as anyone with FICO scores in the 630 to 689 range. It has an annual fee of $39 and pays a flat 1.5% on all purchases. If you make your first five payments on time, Capital One may increase your credit limit. The ongoing APR is 24.99% Variable APR.

If you really want a store card

Store credit cards are not all bad. Far from it. If you check out the APR before carrying a balance, make sure there isn’t a general card that would be better for you, and shop at the same store often enough to make it worth it, applying for a store card could make sense.

Here are a few of the best store credit cards:

The cardThe benefitsThe drawbacks
Amazon Prime Store Card* Earn an unlimited 5% back as a statement credit.
* 6- to 24-month interest-free financing depending on amount or type of purchase.
* There's no annual fee, but you have to be an Amazon Prime member — for $99 a year.
* If you don't pay off your purchases within the 0% interest period, you'll have to pay deferred interest going back to when you made the purchase.
Target REDcard* Get 5% off at Target and Target.com.
* Free shipping on most purchases at Target.com.
* Card members get 30 extra days for returns.
* The card is chip-and-PIN enabled.
* There's no 0% interest period.
Gap Inc Visa Card* The card can be used anywhere Visa is accepted.
* You'll earn 5 points on every dollar spent within the brand family (Gap, Old Navy, Banana Republic and Athleta) and 1 point per dollar spent elsewhere. Points are worth 1 cent each.
* The $0.
* On Tuesdays, you’ll get 10% off all Gap-brand products at the Gap, Gap Factory and gap.com, and additional discounts and promotions exclusively for cardholders.
* You must redeem rewards at an affiliated store.
* There's no 0% interest period.

» MORE: NerdWallet’s best store credit cards

Virginia C. McGuire is a staff writer at NerdWallet, a personal finance website. Email: virginia@nerdwallet.com. Twitter: @vcmcguire.