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NerdWallet’s Best Store Credit Cards of 2016

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NerdWallet's Best Store Credit Cards - 2015

If you do a lot of shopping in one place, a store-branded credit card could save you more money there than a general-purpose card would. Many store cards offer customer loyalty benefits and rewards that you’d be hard-pressed to match with a general card. And these cards are often available to consumers with fair or poor credit, which is not the case with many of the more popular general cards.

NerdWallet surveyed store credit cards from large outlets to find the ones with the best rewards-earning rates and the most valuable rewards. These were the cards that ranked the highest:

We also surveyed general credit cards that offered high rewards at department stores and other retailers. These cards, which both require good credit (generally, scores of 690+), topped the list:

First, a word of caution

While store cards generally offer exclusive discounts and loyalty benefits, even to people with subpar credit, most come with caveats that don’t apply to good, general-purpose credit cards. Here are some guidelines for getting the most out of a store card.

  • Always pay your balance in full. Store credit cards usually have APRs ranging from 25% to 30%. If you carry debt, you could end up paying a lot more for your purchases. These cards also tend to have lower credit limits, so carrying a balance on them could hurt your credit.
  • Know the difference between “closed-loop” cards and “open-loop” cards. Many store cards are “closed-loop” cards, meaning you can use them only at the issuing store, or perhaps at a group of stores. If you want a card you can use anywhere, look for one with a Visa or MasterCard label on the front. These are known as “open-loop” cards. Among our picks for best store cards, the Gap Inc. Visa Card and the TJX Rewards Credit Card are open-loop.
  • Pay in full before your store card’s 0% financing offer ends. Store cards often offer “special” financing terms, under which you won’t be charged interest if you pay off the balance within a certain time frame. But these are usually “deferred interest” offers. That means if you have any balance left over at the end of the 0% period, you’ll be charged retroactive interest on the entire purchase, going all the way back to when you first made it. By contrast, general-purpose credit cards with 0% APR offers don’t typically charge retroactive interest. If you carry a balance past the end of the 0% period, you’re charged interest only on that amount, and only going forward.

NerdWallet recommends general credit cards to most consumers, because these typically come with higher limits, more versatile rewards and no retroactive interest. But if a store credit card matches your spending habits or credit profile more closely, and if you can avoid interest charges and other fees, it could be a better deal.

Best store cards

Best for fast shipping:
Amazon Prime Store Card

Earn an unlimited 5% back as a statement credit, plus get promotional financing. Closed-loop. No annual fee. 

Benefits of the Amazon Prime Store Card

  • You get an unlimited 5% back as a statement credit on all Amazon.com purchases. You can also get 0% promotional financing from six to 24 months on purchases totaling $149 or more.
  • The card has no annual fee.

Downsides of the Amazon Prime Store Card

  • The card charges deferred interest on its promotional financing if you don’t pay it down within a certain period of time.
  • The card comes with a high ongoing APR.
  • Only Amazon Prime members are eligible for this card.
  • The card is closed-loop and can only be used on Amazon.com.

The bottom line

If you shop almost exclusively at Amazon and carry a $99-per-year Prime subscription, you might find that the Amazon Prime Store Card offers more value than general credit cards. With your Prime membership, you can already buy just about anything at a low price with free two-day shipping on Amazon.com. But with this card, you can also collect an unlimited 5% in statement credit rewards on those purchases. (Most general credit cards that offer 5% rewards have quarterly spending caps.)

This card’s 0% financing offers on large purchases can save you money on interest, too, provided that you pay off the balance on time. But if you hardly use your Prime subscription, and you don’t need the financing help, you might be better off with a general credit card.

Best for everyday items
Target REDcard

Get 5% off every day, plus 30 extra days for returns and free shipping at Target.com. Closed-loop. No annual fee.

Benefits of the Target REDcard 

  • You get a 5% discount on all Target purchases, free shipping at Target.com and 30 extra days for returns. Instead of collecting rewards to redeem later, you get value out of this card upfront. (This discount doesn’t apply to Target gift cards or prepaid cards.)
  • This card is one of the few cards in the U.S. that is chip-and-PIN enabled, which offers more protection against card fraud and theft. Most cards in the U.S. are chip-and-signature.
  • The card has no annual fee.

Downsides of the Target REDcard 

  • You can use this closed-loop card only at Target and Target.com.
  • This card doesn’t offer 0% financing.
  • The card has a high ongoing interest rate.

The bottom line

The Target REDcard lets you save on your purchases upfront, without offering a complicated redemption program. If you’re a frugal spender and do most of your shopping — clothes, food, furniture — at Target, this card’s 5% discount could add up to hundreds of dollars in saving per year. Most general credit cards don’t offer bonus rewards for shopping at superstores like Target. Cardholders also get free shipping on Target.com purchases and extra time for returns, valuable loyalty perks.

This card doesn’t offer 0% financing and has high ongoing interest, so it’s not a good deal if you’re planning on carrying a balance. But if you want to save on your Target purchases with a card that offers no-fuss discounts, it could be a good deal.

Best for clothes:
Gap Inc. Visa Card

Save 15% on your first purchase; earn 5 points for every $1 spent at Gap brands, in-store or online, and 1 point per dollar spent elsewhere. Open-loop. The annual fee is $0. 

Benefits of the Gap Inc. Visa Card

  • The Gap Inc. Visa Card is available as an open-loop Visa card, and you can earn rewards anywhere.
  • You can save 15% on your first purchase after signing up, and 5 points for every $1 spend at Gap brands, in-store or online, and 1 point per dollar spent elsewhere. Points are worth 1 cent each, and can be redeemed for credit at Gap, Athleta, Old Navy or Banana Republic.
  • On the first Tuesday of every month, cardholders get 10% off at Gap.com and in Gap stores.
  • As a cardholder, you can return purchases without receipts and get exclusive offers in the mail.
  • If you earn 5,000 points in a year (by spending $1,000), you’ll achieve Gap Silver status. This comes with 20% quarterly rewards bonuses, free online shipping, free basic alterations on Banana Republic purchases and other benefits.
  • The annual fee is $0.

Downsides of the Gap Inc. Visa Card

  • The card has a high ongoing interest rate.
  • This card doesn’t offer 0% financing.
  • This isn’t a good card if you don’t spend a lot on clothing. Gap brands primarily offer clothes but not other household items.

The bottom line

If you do all of your wardrobe shopping at Gap and its sister stores, the Gap Inc. Visa Card‘s high rewards rate and cardholder benefits could save you a lot of money. The card offers an unlimited 5 points per dollar spent at Gap brands, from Old Navy to Banana Republic, and 1 point per dollar spent elsewhere. And if you earn over 5,000 points, you’ll achieve Gap Silver status, and get other valuable loyalty perks, including free basic alterations on Banana Republic purchases.

Keep in mind that other general credit cards sometimes offer bonus rewards for all department stores, not just Gap and its partner stores. This card offers excellent loyalty benefits, but like most store cards, lacks redemption flexibility.

Best for home improvement:
Lowe’s Consumer Credit Card

Get 10% off your first purchase; 5% off every day or promotional financing. Closed-loop. No annual fee.

Benefits of the Lowe’s Consumer Credit Card

  • You get an unlimited 5% off everyday purchases. You can also opt for 0% financing on purchases of at least $299, instead of claiming the 5% rewards.
  • The card has no annual fee.

Downsides of the Lowe’s Consumer Credit Card

  • The card is closed-loop and can only be used at Lowe’s stores.
  • If you don’t pay off items with special financing by the end of the 0% period, you’ll owe deferred interest on the balance.
  • The card has a high ongoing interest rate.

The bottom line

The Lowe’s Consumer Credit Card offers better rewards than most home improvement credit cards. Boasting an unlimited 5% off all purchases, or special financing on larger purchases, this card even offers a higher rewards rate on home improvement purchases than most general credit cards. And because the rewards come as a 5% discount, instead of points to cash in on later, this card won’t tempt you to overspend as much other cards might.

If you have subpar credit and can’t qualify for other 0% APR deals, this 0% financing could also save you a small fortune on interest charges, if you pay it off on time. If you’re looking one-time discount and don’t shop at Lowe’s often, though, you might be better off with another card that offers better overall rewards.

Best for discounts:
TJX Rewards Credit Card

Get 10% off first in-store purchase. Earn 5 points per dollar spent at TJ Maxx, Marshalls, HomeGoods and Sierra Trading Post and 1 point per dollar spent elsewhere; points worth 1 cent each. Open-loop. No annual fee. 

Benefits of TJX Rewards Credit Card

  • You get 10% off your first in-store purchase and earn an unlimited 5 points per dollar spent at T.J. Maxx, Marshalls, HomeGoods and Sierra Trading Post, and 1 point everywhere else. You can redeem points for 1 cent each as a certificate at T.J. Maxx and partner stores.
  • The card is a MasterCard, so it’s accepted in most stores.
  • No annual fee.

Downsides of TJX Rewards Credit Card

The bottom line

The TJX Rewards Credit Card can get you more rewards than a general credit card might, whether you’re shopping for gifts, clothing, home decor or cookware. It offers an unlimited 5 points per dollar spent in T.J. Maxx and partner stores, and 1 point per dollar spent elsewhere — generous rewards, compared to other discount store credit cards. Keep in mind that most general credit cards don’t offer bonus rewards for shopping at discount outlets.

If you spend a relatively small amount on clothes and other household items, you’d be better off with a different card. The TJX Rewards Credit Card could be a good deal, though, if you always purchase your clothes and household items at these bargain outlets.

Top general-purpose cards for shopping

Best for rotating categories

Chase Freedom®

Apply Now on Chase's secure website

Pros

  • No annual fee
  • 5% rewards on rotating categories
  • Access to Chase’s Ultimate Rewards site to earn more cash back

Cons

  • If you value simplicity, a flat rate cash back card may be better
  • A foreign transaction fee

Bonus Offer

Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening

Annual Fee

$0

Intro APR Promotions

0% on Purchases and Balance Transfers for 15 months

APR

  • APR: 14.24% - 23.24% Variable APR
  • Cash Advance APR: 25.24%, Variable

Card Details

  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
  • Unlimited 1% cash back on all other purchases - it's automatic
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 14.24-23.24%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • Enjoy new 5% categories every 3 months like gas stations, restaurants, and wholesale clubs
  • Cash Back rewards do not expire as long as your account is open
  • No annual fee

Earn 5% cash back on rotating rewards categories on up to $1,500 in quarterly purchases, and 1% cash back on all other purchases. Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. The annual fee is $0. Introductory APR of 0% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 14.24% - 23.24% Variable APR. 

Requires good credit (score of 690+).

Benefits of the Chase Freedom®

  • You get 5% cash back on rotating rewards categories on up to $1,500 in quarterly purchases, and 1% cash back on all other purchases.
  • As a Visa card, the Chase Freedom® is accepted in most stores.
  • You’ll get a sign-up bonus: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • The annual fee is $0.
  • You get an introductory APR of 0% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 14.24% - 23.24% Variable APR. Chase doesn’t charge deferred interest on the balance if you’re still paying it off after the promotional period ends.

Downsides of the Chase Freedom®

  • You have to opt in to the 5% bonus categories every quarter, which may be a hassle for some. Here’s how it works.
  • There’s a $1,500 quarterly spending limit on 5% bonus rewards.
  • You won’t get exclusive store offers, as you would with a store credit card.

The bottom line

The  Chase Freedom®, which offers 5% cash back on quarterly bonus categories, isn’t a store card — but its store-specific bonus rewards make it worth considering. Historically, the card has featured  big-name retailers in the rotating 5% bonus categories, including H&M, Kohl’s, Bed Bath & Beyond, Amazon.com and Zappos.com. Other 5% categories have included restaurants and gas stations. The card also comes with  much lower ongoing interest rates than most store credit cards offer.

The  Chase Freedom® doesn’t come with some of the loyalty benefits that many store-branded cards offer, such as free shipping on online purchases or unlimited 5% rewards. And you won’t get the credit card instantly, as you would if you applied for a store card; generally, it takes a few days to receive the card in the mail. But compared with other store cards, its rewards are much more versatile.

Best for online shopping

Discover it® - Cashback Match™

Apply Now on Discover's secure website

Pros

  • Cash back match at the end of your first year
  • Bonus cash back categories
  • No annual fee
  • 0% on purchases for 14 months and 0% on balance transfers for 14 months

Cons

  • Slightly less merchant acceptance for Discover in US - acceptance outside of US can be an issue
  • No sign-up bonus
  • If you value simplicity, a flat rate cash back card may be better

Bonus Offer

Cashback Match™ - We’ll automatically match all the cash back you earn at the end of your first year. New cardmembers only.

Annual Fee

$0

Intro APR Promotions

0% on Purchases and Balance Transfers for 14 months

APR

  • APR: 11.24% - 23.24% Variable APR
  • Cash Advance APR: 25.24%, Variable

Card Details

  • Cashback Match™ - We’ll automatically match all the cash back you earn at the end of your first year. New cardmembers only.
  • Earn 5% cash back in new bonus categories each quarter like gas, restaurants, Amazon.com and more, up to the quarterly maximum each time you activate. Plus, unlimited 1% cash back on all other purchases.
  • Redeem your cash back for any amount, any time. Cash rewards never expire.
  • 100% U.S. based customer service.
  • Get your FICO® Credit Score for free on monthly statements and online.
  • No annual fee.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.

Earn 5% cash back on rotating rewards categories on up to $1,500 in quarterly purchases, and 1% cash back on all other purchases. Double your cash back in the first year. The annual fee is $0. Introductory APR of 0% on Purchases and Balance Transfers for 14 months, and then the ongoing APR of 11.24% - 23.24% Variable APR.

Requires good credit (score of 690+).

Benefits of the Discover it® - Cashback Match™

  • The card offers 5% cash back on rotating rewards categories on up to $1,500 in quarterly purchases, and 1% cash back on all other purchases.
  • You’ll get a sign-up bonus: Double your cash back in the first year.
  • The card comes with a free FICO score.
  • The card comes with an 0% APR promotion: 0% on Purchases and Balance Transfers for 14 months, and then the ongoing APR of 11.24% - 23.24% Variable APR. If you still have a balance after the 0% APR period ends, Discover won’t charge you deferred interest.
  • With your card, you can access Discover Deals and get up to 20% cash back at different outlets.
  • The card has an annual fee of $0.

Downsides of the Discover it® - Cashback Match™

  • To receive the 5% bonus rewards, you have to opt into the bonus categories every quarter. The categories may not always align with your spending.
  • Discover cards aren’t as widely accepted as MasterCard or Visa.
  • Unlike a store card, you won’t receive exclusive discounts in the mail.

The bottom line

The Discover it® - Cashback Match™ gives you access to an outstanding bonus mall, called Discover Deals, where you can earn up to 20% cash back on purchases from certain online retailers by following the link while you’re logged-in to your account. It includes cash back offers from Walmart, JCPenney, Home Depot and many other online stores. Unlike most bonus malls, it also offers some in-store deals on its mobile app. Like the  Chase Freedom®, the Discover it® - Cashback Match™ also offers 5% cash back on rotating categories, on up to $1,500 in purchases per quarter. In the past, these categories have included gas and ground transportation, home improvement stores, department stores and Amazon.com.

If you want other loyalty benefits, like free online shipping or exclusive sales, you may be better off with another offer. But if you’re a dedicated online shopper, these deals could save you a bundle on your favorite sites.

To recap our selections:

NerdWallet’s best store credit cards

Best for … Card
Fast shipping Amazon Prime Store Card
Everyday items Target REDcard
Clothes Gap Inc. Visa Card
Home improvement Lowe’s Consumer Credit Card
Discounts TJX Rewards Credit Card
Also consider these general-purpose cards that are great for shopping
Best for … Card
Rotating categories Chase Freedom®
Online shopping Discover it® - Cashback Match™

Last updated: August 8, 2016. 

Claire Tsosie is a staff writer at NerdWallet, a personal finance website. Email: claire@nerdwallet.com. Twitter: @ideclaire7.