Store credit cards are sometimes criticized as being a big sales pitch when you check out at the cash register.
However, what many people don’t understand is that if you have one of the best store credit cards, you can save tons of money at the stores you love.
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The Store Credit Cards We RAVE About
We have all been there—checking out at the cash register and the clerk asks you if you are interested in opening a store credit card to get 20% off your purchase. Maybe you opted in, got your discount, and went on your merry way. Or, maybe you thought it was a scam and ignored the clerk. A store credit card in your wallet can actually bring some great benefits, but you need to have the right one.
If you continue to pay with cash or a debit card, you very well could be leaving money on the table. We want to make sure that you are saving as much money as possible, earning rewards, and using your store credit card to the max. Let’s jump right in and see what a bit of plastic can do for you.
Open Loop vs. Closed Loop: How Store Credit Cards Work
Not all credit cards are created equal, and that holds true for store credit cards as well. Store credit cards are unique among credit cards in that they are branded for a specific store. This can mean one of two things: All of the rewards or cash back from purchases on the credit card can only be used for future expenses at the co-branded store, or the credit card can only be used at the co-branded store.
If a store credit card can only be used at the specific co-branded store, it’s often referred to as a closed-loop card. You will not be able to make any purchases with the card at other stores or other types of businesses. The reason stores offer closed-loop cards is that they hope to retain business, encouraging cardholders to keep shopping at their store only.
In order to entice you to continue to shop with their credit card, stores offer discounts or rewards toward future store purchases each time you swipe at the register. Most closed-loop store credit cards offer significant savings or cash back at their stores. Other perks or exclusive opportunities for cardmembers are included as well.
An open-loop store credit card can be used at other stores or merchants. These cards often have bonus categories for purchases outside of the store and work more like a general-purpose credit card. The rewards you can earn on these cards are often only available for use at the co-branded store.
So an open-loop card might offer a certain percent back on things like groceries, gas, or dining, but that percent you get back can only be used at the co-branded store. The reason stores have open-loop cards is to keep customers coming back. If you have $20 off your next purchase at Macy’s, you are much more likely to buy your next jacket or pair of pants at Macy’s.
All store credit cards operate in the same way that other credit cards do. You make purchases, have a bill each month, and then are required to make a minimum monthly payment. If you carry a balance over from month to month, interest accrues on the balance.
Pros and Cons of Store Credit Cards
Depending on your shopping habits, you may either be wondering why anybody would ever want a store credit card, or why somebody wouldn’t want one. Who would want a card with cash back rewards that are valid for only one store? Why wouldn’t you get a card if it gives you large regular discounts on your monthly mall visit?
If you frequently shop at one particular store, whether it is a department store, home improvement store, or anywhere else, you are the prime candidate for a store credit card. Even if you shop on occasion at a particular store, the larger discounts store credit cards offer can be worth it. Oftentimes store credit cards offer more rewards or greater discounts than a general-purpose credit card. This is one of the biggest pros of having a store co-branded credit card.
The biggest downside to store credit cards is that they often don’t give the flexibility and versatility of general-purpose cards. If you use a closed-loop card, you won’t be able to use the card anywhere else. With open-loop cards, you may be able to get some benefit at other merchants, but it is often less than other credit cards. You will then be forced to use the rewards at the co-branded store.
The other very big negative of store credit cards is that they often carry higher than average interest rates. Here at RAVE, we always recommend paying off your statement balance in full and on time every month. However, we understand that sometimes you have to carry a balance for a plethora of reasons. If you do have to carry over a balance for a month or two, avoid keeping that balance on a store credit card. The extra high interest on these cards negates any benefit or discount you receive from them.
Now that you understand how store credit cards work and why they may or may not be right for you, let’s take a look at some of the best store credit cards.
As you analyze various store credit cards, it can be difficult to decipher what makes one credit card a better option than another. With store credit cards, it also depends on your shopping habits and where you typically shop. We looked at the annual fee and assessed if it is worth the value of the card. Does this card offer a one-time discount or ongoing discounts at the store? We researched many cards to decipher which card is best in various categories of store credit cards. To determine the best store credit cards, we considered the following criteria:
- Annual fee: What is the annual fee you have to pay for this card? Is it worth paying this amount for the benefits and rewards?
- Sign-up bonus: Does this credit card offer a sign-up bonus of cash back or other rewards? How much is it worth? Does it offer a gift card for the associated store?
- Bonus earning categories: What purchases and in which categories does this card earn rewards or cash back?
- Other benefits: What other perks does this card offer? Are there any ongoing benefits or discounts at the associated store? What about other typical credit card benefits, like travel protection or purchase protection?
Best Store Credit Card for Online Shopping
Amazon Prime Rewards Visa Signature Card
- Annual fee: $0 (with paid Amazon Prime membership at $119 per year)
- Sign-up bonus: $100 Amazon Gift card upon account approval
- Bonus earning categories: 5% cash back at Amazon.com and Whole Foods Market; 2% cash back at restaurants, gas stations, and drugstores; 1% cash back on all other purchases
- Other benefits: No foreign transaction fees; travel accident insurance; lost baggage reimbursement; auto rental collision damage waiver; baggage delay insurance
The Amazon Prime Rewards Visa Signature Card is the absolute best card you can use for online shopping. Nowadays, most of your online shopping likely happens on Amazon thanks to great prices, variety of products, and free 2-day shipping with Prime.
This card technically doesn’t have an annual fee, however you will need to have a paid Amazon Prime subscription to get it. An Amazon Prime membership costs $119 a year, so this card is best if you already maintain an annual subscription.
The card offers a decent sign-up bonus of a $100 Amazon gift card instantly upon approval. Although a gift card is not quite as good as cash, if you make at least $100 in purchases on Amazon each year it is effectively the same as getting cash. You won’t even have to make a purchase to get this sign-up bonus, so there isn’t much to lose by applying for this card.
The card earns 5% cash back at Amazon.com and at Whole Foods Market, which is now owned by Amazon. That is a really great rewards earning rate for every dollar you spend on Amazon purchases. If you frequent Whole Foods Market, you’ll earn even more every year.
Another great feature of this card is that it can be used at places other than just Amazon businesses. You will also earn 2% cash back at restaurants, gas stations, and drugstores. Every other dollar spent on the card earns 1% cash back.
This card can also be great for travel as it has travel accident insurance, lost baggage reimbursement, baggage delay insurance, auto rental collision damage waiver, and no foreign transaction fees.
All things considered, the Amazon Prime Rewards Signature Visa is one of the best store credit cards, especially for online shopping. Because you almost assuredly buy everything except groceries on Amazon, this card is a great addition to your wallet.
- No exclusions for discounts
- Cash back on gas and dining
- Multiple travel protections
- Need Amazon Prime Membership
Best Store Credit Card for Everyday Purchases
Target REDcard Credit Card
- Annual Fee: $0
- Sign-up bonus: None
- Bonus earning categories: 5% discount on all eligible purchases at Target and Target.com
- Other benefits: Free 2-day shipping at Target.com on eligible items; Extended Return policy; anniversary discount coupon; in-store Starbucks 5% discount; additional 5% (for a total of 10%) discount on subscriptions
The Target REDcard is definitely a fan favorite among store credit cards—Target is essentially everywhere and offers a wide range of products. Now that many Target stores offer groceries, you can do almost all of your shopping there, from school supplies to groceries to kids’ clothing. You can get a lot of value from the discounts with this card.
The REDcard does not have an annual fee, making it great to have in your arsenal of plastic. It does not have any sort of sign-up bonus or introductory offer, but that is not uncommon for a store card without an annual fee. Despite the lack of a sign-up bonus, this card offers a consistently high discount on all of your Target purchases.
This card does not earn rewards or cash back in a traditional credit card manner, but instead offers a 5% discount on every purchase at Target and on Target.com. That is a very high discount that you can apply every time you checkout. You just have to make sure to make your purchases with the REDcard. If you forget your card at home and have to use another credit card, you won’t be granted the discount.
This credit card has two really great benefits that make it worth a lot more: free 2-day shipping on Target.com (on eligible items) and an extended return policy. You won’t even have to leave the comfort of your bed or couch to make all of your purchases and receive them in 2 days.
The extended return policy also ups the return window on Target purchases from 90 days to 120 days. The 90-day return window is incredibly generous, but the additional 30 days can give you extra time (and peace of mind) for some of your larger purchases. With these two perks, Target.com might be a better option than Amazon Prime for many of your purchases. You will still get your stuff in 2 days and have a much larger return window on top of the extra 5% off.
While you shop at Target, you will also get a 5% discount at the in-store Starbucks so that you can peruse with your favorite latte in hand. On your card membership anniversary, you will also receive a 10% discount to use in-store—the only caveat is that you have to be subscribed to Target’s marketing emails.
Even if you don’t spend thousands of dollars at Target, you will still get some solid value from this card. Because it has no annual fee, it can be a great card to have even if you don’t use it very often. Check out this card and apply now.
- Discount applies to most items
- Free 2-day shipping
- In-store Starbucks discount
- Closed-loop card
Best Store Credit Card for Wholesale Club Purchases
Costco Anywhere Visa Card by Citi
- Annual fee: $0 (requires paid Costco membership, which starts at $60 per year)
- Sign-up bonus: None
- Bonus earning categories: 4% cash back on eligible gas worldwide; 3% cash back on restaurants and travel; 2% cash back on all other Costco and Costco.com purchases; 1% cash back on all other purchases
- Other benefits: No foreign transaction fees; damage and theft purchase protection; extended warranty
The Costco Anywhere Visa Card by Citi is a great overall store credit card, but it really shines when it comes to wholesale club purchases. Costco has such a large footprint now that almost everybody has a Costco near them. Everybody also knows that Costco offers some of the cheapest bulk deals in town and a wide variety of products—anything from clothing to alcohol.
This card does not have an annual fee, but does require an annual Costco membership, which starts at $60 a year. You won’t get a sign-up bonus with this card, but it does offer some great potential with its cash back and bonus categories.
You will earn 4% cash back on eligible gas purchases worldwide. You might think you will only get the 4% back on gas purchases at Costco, but that’s not the case: You will get 4% cash back at most gas stations worldwide. The card also earns 3% cash back on restaurants and travel as well as 2% cash back on all Costco and Costco.com purchases. Costco trips can cost a pretty penny (sometimes more than you plan), so the 2% adds up quickly. Then, you earn 1% cash back on every dollar spent on other purchases.
Be aware that the rewards you earn are only redeemable at Costco. At the end of each year, you will receive a voucher for the amount of cash back you have earned, which you can use on your next Costco shopping trip.
The card also has theft purchase protection, extended warranty, and no foreign transaction fees. If you are already a Costco member, this would be a great card to have, as it won’t cost you anything. It earns great cash back on many categories and gives you high rewards for all of your gas purchases.
- Multiple bonus categories
- Large discount on gas
- No foreign transaction fees
- Requires Costco Membership
- Rewards received once a year
Best Store Credit Card for Department Stores
Macy’s American Express Credit Card
- Annual fee: $0
- Sign-up bonus: 20% discount when you open your account or the day after, up to $100 total saved
- Bonus earning categories: Three Star Rewards points at restaurants; two Star Rewards points at gas stations and supermarkets; one Star Rewards point on all other purchases
- Other benefits: 25% off Any Day Star Passes; birthday offer; ability to get free shipping and increased rewards by reaching Gold or Platinum Level; Entertainment Access
The Macy’s American Express credit card is a great card to have thanks to some great bonus earning, no annual fee, and already great prices and regular sales at Macy’s. You will earn rewards and discounts with your card but also have the chance for higher rewards by spending more at the store.
The sign-up offer for the Macy’s American Express card is a 20% discount on your purchase on either the day you open the card or the following day. You are limited to $100 off with the discount, but $100 savings is pretty good for a no annual fee card. The best thing about this card is that it is open-loop and can be used at any merchant that accepts American Express.
This card has superb bonus categories, especially for a store-branded card with no annual fee. You will earn three Star Rewards points at restaurants, two Star Rewards points at gas stations and supermarkets, and one Star Rewards point on all other purchases. Each Star Rewards point is worth 1 cent, so you effectively earn 3%, 2%, and 1% back in each category. Just be aware that all rewards you earn can only be used towards Macy’s purchases.
The card also comes with 25% off any day Star Passes periodically. You will also get a birthday surprise, which is likely an additional discount offer for your next purchase. You automatically get Silver Star Rewards status, but if you spend more on your card you can achieve a higher rewards program level—$500 or more for Gold and $1,200 or more for Platinum.
Gold Star Rewards members receive free shipping with no minimum. Platinum Star Rewards members will also receive 5% back in rewards for purchases at Macy’s (no merchandise exclusions). If you are a regular shopper at Macy’s, you should definitely get this card. If you can reach Platinum status each year, you will reap some astounding rewards at the store as well as extra rewards for gas, dining, and groceries outside the store.
- Large sign-up discount
- Generous bonus categories
- Free shipping
- Rewards only valid for Macy’s
Best Store Credit Card for Gas
Sam’s Club Mastercard
- Annual fee: $0 (requires Sam’s Club paid membership, which starts at $45 per year)
- Sign-up bonus: None
- Bonus earning categories: 5% cash back on gas (up to $6,000 spent each year); 3% cash back on dining and travel; 1% cash back on all other purchases
- Other benefits: No foreign transaction fees
When it comes to gas purchases, wholesale clubs like Sam’s Club and Costco offer the cheapest gas in town. Additionally, their credit cards offer some solid returns on gas purchases (and not just at their own gas stations).
The Sam’s Club Mastercard is definitely the best credit card for gas purchases. This card does not have an annual fee, but it does require having a Sam’s Club membership, which starts at $45 per year. Like other no annual fee store credit cards, it does not have a sign-up bonus.
This credit card earns a whopping 5% back on cash throughout the entire year. Some other credit cards offer 5% on gas, but it’s usually only for one quarter of the year. The 5% cash back on gas is good for the first $6,000 spent each year, which you’re unlikely to hit. The 5% back on gas is good for most gas stations—you just won’t receive the discount on gas at other wholesale clubs.
One of the other great benefits of this card is that it has other great bonus cash back earning. You will earn 3% back on dining and travel, and it also has no foreign transaction fees, so you will save a ton of money on your next international trip. Every other dollar spent earns 1% cash back.
One thing to be aware of is that your rewards are available at the end of each year and can be used for cash, statement balance credit, or for your next purchases at Sam’s Club.
If you have a Sam’s Club near you and are possibly already a Sam’s Club member, this card would be great for you and your family thanks to its earning on gas, travel, and dining.
- Most cash back on gas
- Bonus rewards on dining and travel
- Requires Sam’s Club Membership
- Rewards received once a year
Best Store Credit Card for Electronics
My Best Buy Visa from Citi Bank
- Annual fee: $0 (or $59 depending on creditworthiness)
- Sign-up bonus: 10% back in rewards on your first day of purchases (must be made within 14 days of opening the credit card)
- Bonus earning categories: 5% back in rewards for Best Buy purchases (6% for Elite Plus members); 3% back on purchases at gas stations; 2% back on restaurant purchases; 1% back on all other purchases
- Other benefits: Deferred financing option instead of Best Buy purchase 5% rewards; no foreign transaction fees
The My Best Buy Visa from Citi Bank is the best store credit card for all you tech lovers out there. For anybody that is in the market for some new electronics or tech, this just might be the card for you.
This card generally has no annual fee, but some applicants will be charged a $59 annual fee based on creditworthiness. The $59 annual fee card might not be worth the value, but the $0 annual fee card is definitely worth considering.
The sign-up bonus for this card is not typical of regular credit cards but not uncommon for store credit cards. You get an initial discount offer of 10% on your first day of purchases at the store—the only catch is that you have to make your initial purchase within 14 days of opening the account. Considering the price of electronics, you could save quite a bit of money with 10% off.
The My Best Buy Visa has some solid potential on other bonus rewards earning as well. You will earn 5% back in rewards for purchases at Best Buy. If you are an Elite Plus member at Best Buy (which requires $3,500 annual purchases at Best Buy), you will earn 6%. You will then earn 3% back in rewards for all of your gas expenses and 2% back on restaurants. Everything else earns 1% back.
Instead of the 5% back in rewards on your Best Buy purchases, you can opt for a deferred financing plan on any purchases of $199 or more. The deferred financing plan might be a good option but there is risk if you miss payments or don’t pay it off in time. Because of this it is recommended to stay with the 5% back in rewards. One thing to be aware of is that your rewards are good towards future purchases at Best Buy.
If you are a tech lover or in the market for some new and updated electronics, the My Best Buy Visa from Citi will be a great card for you.
- Discount or financing options
- No foreign transaction fees
- Subpar sign-up offer
- Annual fee for bad credit
Best Store Credit Card for Home Improvement
Lowe’s Advantage Credit Card
- Annual fee: $0
- Sign-up bonus: Varying promotional offers
- Bonus earning categories: 5% discount on eligible Lowe’s purchases
- Other benefits: 6-month special financing option instead of 5% discount; project fixed payment financing for projects over $2,000
The Lowe’s Advantage Credit Card is the best store card for all of your home improvement needs. Whether you have a small project to finish up or are looking to remodel your kitchen, this credit card can really help keep the cost in check.
This credit card has no annual fee, which is typical of most closed-loop store credit cards. The sign-up offer on this card changes from time to time as well as offers different options. The card can offer a certain amount off of your first purchase or offer some killer financing deals on specific items. It is definitely worth checking out which promotional offer will best suit your needs.
Because this card can only be used on Lowe’s purchases, it only offers one way to earn any sort of bonus rewards. You won’t get cash back or rewards per se, but you will get a flat 5% discount on eligible items at Lowe’s stores. Most items qualify, but there are some things that won’t, like delivery fees or warranties among others. A flat-rate 5% discount is really generous, making this card great for your home projects.
The Lowe’s Advantage credit card has a unique feature in that you can forego the 5% discount at the register and instead opt for special financing. For purchases over $299, you can finance the purchase over 6 months and not pay any interest. If you choose this option, just be sure to pay it off before the 6 months is up, or else you will be back-charged interest from the purchase date.
With this card, any project that costs more than $2,000 is eligible for a Fixed Payment Financing plan. With this option, you will have a reduced APR for project expenses for 84 months. This can be a really great option if you are looking to do a large project that you might not have the cash on hand for immediately.
Although this closed-loop card doesn’t have a ton of benefits, it really can make your home improvement efforts easier on the wallet. The Lowe’s Advantage credit card is definitely the right card for your next remodel or quick fix.
- Multiple sign-up offer options
- Financing plans
- Closed-loop card
Can I use store credit cards at other stores beside each one specific store?
This ultimately depends upon each credit card and its rules for making purchases. Some credit cards are considered closed loop where you can only use the card at the designated store. Other cards are considered open loop in which the card can be used at stores or merchants other than the designated store.
Closed-loop cards can be limiting in the rewards they earn since they are only accepted at one place. An open-loop card would be more ideal if it earns rewards on other bonus categories so you can use it everywhere.
Should I use another kind of credit card at stores rather than store-specific cards?
You will have to look at the potential earnings between your store credit card and the other credit cards in your wallet. Many other non-store branded credit cards have bonus categories that may or may not earn more cash back or rewards.
But as you can see from our list of best store credit cards, many cards offer bonus categories for things other than store purchases. Many of the cards give bonuses on groceries, gas, and clothing, among other things.
Are there any store credit cards with annual fees? Are they worth paying an annual fee?
Most store credit cards do not have annual fees, although some have annual fees. Others will only assess an annual fee if your previous credit history warrants it. The reason that most store credit cards do not have annual fees is likely because they don’t offer as significant rewards as many other typical credit cards.
Most store credit cards are not worth an annual fee. Especially since many store credit cards can only be used at the store, it is especially not worth paying a fee.
Should I cancel my store credit card if I don’t live near the store anymore?
This very much depends on what the card offers outside of the discounts and how its rewards system works. Many store credit cards earn rewards that have to be used on purchases at the store. These types of cards aren’t worth it if you don’t live near one of the stores.
If the card offers cash back on things other than purchases at the store and those rewards can then be redeemed for statement credit or cash back, it might be worth it. This isn’t extremely common for store credit cards so just be sure of the rewards system before you get a card for a store that isn’t near you.
Can I get a credit line increase on my store credit card? What are the benefits?
Credit line increases on store credit cards are quite difficult to achieve. Most of the time you will not be granted a higher credit limit, even if you have a high income and a great credit score. Store credit cards are known for keeping credit limits low.
A higher credit limit can help lower the amount of credit you use on a regular basis. This ultimately helps your credit score, but it’s better to try on the other general-purpose credit cards you may have.
What are the best store credit cards?
The best store credit card is different for each person based upon their spending habits and favorite stores. Find the card that will give you the most rewards for the things you love.
If you are a frequent online shopper and an Amazon lover, the Amazon Prime Rewards Visa Signature is the card for you. You can get a 5% discount on all of your Amazon purchases and $100 to spend at Amazon when you are approved.
If you want a card that will give you massive benefit for your everyday purchases, look no further than the Target REDcard. You will get a 5% discount on most items in the store and online. You will also get free 2-day shipping on Target.com. Don’t forget the 5% in-store Starbucks discount for your caffeine fix.
If you love clothes and shopping at department stores, check out the Macy’s American Express Card. You will earn 3% in rewards at Macy’s and bonus rewards for gas and groceries. You can then use all of your cash back rewards toward your next purchase in store.
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- AmazonBasics Travel Packing Cubes: If you like to travel, then packing cubes are a travel essential. These can help keep everything in your bag organized without making a mess every time you need to find something. The package includes four different sizes to customize how you pack.
- Personal Capital Financial Management Software: Personal Capital is hands down some of the best finance management software you will find. It gives you the right tools to stay on budget, monitor your spending habits, and help you get back on track financially.
- Ally Bank High Interest Savings Account: Ally Bank is an online bank that doesn’t have any monthly account maintenance fees. Their high-interest savings account has a 1.50% APY so your money can make money.