Store Credit Card: Should I Have Retail Store Credit Cards?

Should I open a store credit card?

“Would you like to save 15% on your purchase today?” If you shop at chain stores often, you’ve undoubtedly been asked this question. Most of us have been offered the opportunity to apply for a store credit card. In fact, many of us have experienced this frequently. Today, CreditFast evaluates the pros and cons of opening a retail store credit card account.

Store Credit Card: Woman Reviewing the Pros and Cons of Retail Store Credit Cards

Store Credit Card Pros:

  • The most common, most obvious benefit of opening a store credit card is the discount on initial purchases. Some retail stores will even sweeten the deal by offering a promotional APR for a set period. If you are making a major purchase, a store credit card could potentially save you a fairly substantial amount of money.
  • Many store cards allow you to earn rewards or other perks. For example, you might earn one reward point for every dollar you spend at the store or earn a percentage of your purchase price toward future purchases. Stores may also offer cardholders special perks like exclusive coupons, free shipping for online orders, complimentary gift wrapping, free alterations, or access to secret sales. These benefits are yours as long as you keep your account open.
  • Retail store cards often have lower credit approval requirements than other credit cards. When used carefully, a retail store credit card can be a good way to begin building or rebuilding your credit history.

10 Best Store Credit Cards to Build Credit With Easiest Store Credit Card Approvals

Store Credit Card Cons:

  • The interest rates for store cards are usually higher than the rates of other credit cards. Consumers with average credit can find a credit card offer with a standard APR of around 15%-20%. Store credit card standard APR rates are often 25%-30%. Because of this, you’ll want to be sure you don’t carry a balance on your store card.
  • Retail store credit cards are usually one-size-fits-all. If you’re in the market for a general credit card, you have some choices. You can select a card based on its travel rewards, cash back incentives, or low fees. Those with above-average credit can usually find a general credit card that will reward their strong credit history with a low APR. A store card will usually provide only one standard APR and one set of rewards options.
  • Many store credit cards can only be used at the retail chain that issues the card. However, this is not true in all cases. Some retail stores offer a co-branded Visa or MasterCard, which can be used virtually anywhere in the world. Be sure to ask the sales associate about this detail if you’re considering applying for store credit.
  • A store card may hurt your average credit if not used carefully. Store cards tend to have relatively small credit limits. This sometimes means it’s easy to spend a large percentage of your approved credit. Credit bureaus reward consumers whose debt-to-credit ratio is low. In addition to hurting your credit utilization ratio, applying for a store credit card is likely to create a hard inquiry on your credit report. Credit bureaus will penalize you for multiple hard inquiries in short periods of time. Therefore, you shouldn’t apply for store credit cards very frequently.

The Verdict on Retail Store Credit

Should you apply for a retail store credit card? It depends on a variety of factors. You need to choose a credit card that best fits your needs.

Retail store credit cards are a great option if you are making a major purchase, you haven’t recently applied for other credit, and you regularly shop at the store. Let’s say you need to buy a major appliance or expensive holiday gifts for $1,000. You could save $150 on your $1,000 purchase by applying for a home improvement store card. Also, you may also benefit from a special 0% introductory APR, allowing you to pay off the balance interest-free over a few months. Another great option would be the Best Buy Credit Card. You may continue to receive rewards, coupons, or other perks after you have paid the balance. If you haven’t recently applied for other credit and reduce your balance quickly, you should also be able to do this without hurting your credit score.

A store credit card may also be a good choice if you have bad credit or a limited credit history.

You can improve your credit by being approved for the card, making small purchases, and paying them off each month. However, there are also other credit card options that allow you to do the same thing with more flexibility. A secured credit card is more widely accepted than your store card. (If you want to consider this alternative, our editor recommends investigating the Capital One® Secured MasterCard® or The Discover it® Secured Credit Card.) Weigh the options. Some exploring or rebuilding credit feel that the lack of flexibility associated with store cards helps them better control their spending habits.

You might want to steer clear of store credit card applications if you think you’ll be tempted to spend more than you would if you weren’t a cardholder. This is one of the disadvantages of store credit. There is a reason that almost every retail chain offers a store credit card. Consumers tend to show more loyalty to and spend more money at retailers where they have store credit. As we mentioned previously, the interest rates on store cards are higher than average, and the credit limits are lower than average. Overspending and carrying a balance could hurt both your bottom line and your credit score. If you are seriously tempted to spend above your means because you apply for a store credit card, you should avoid it. If you tend not to overspend then applying for a new credit card makes sense.

CreditFast Tip: Use the Shopping Cart Trick.

There’s a variety of retail store credit cards you can apply for using the Shopping Cart Trick. Issued by Comenity Bank, get approved with less than perfect and limited credit histories. When done correctly you can apply for a store credit card without a hard pull appearing on your credit report.

Overall, the Credit Fast team recommends applying for store credit cards if you’re making a major purchase at a store that you shop at regularly. As with every credit card option, it’s important that you use your store credit responsibly. Spend only what you can afford. Pay down your balance as quickly as possible, and watch your credit score continue to improve.

Advertiser Disclosure for the CreditFast website –, provides information about the best credit card applications, as well as other financial products and services. Our goal is to provide you with fair, balanced reviews. Some credit offers that appear on our website are from companies from which CreditFast receives compensation, and some are not.

Monica Kowollik


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