Home Looking into the world of store credit cards

Looking into the world of store credit cards

Nowadays, retail stores also offer credit cards to their customers. These are mainly for frequent shoppers. These types of credit cards can be typically beneficial for you if you can clear your balance amount without getting slapped with interest rates. You can consider this as an option only after calculating its value for your purposes. Otherwise, you can trouble your credit score. Approval may not be an issue as retailers would not want to displease their loyal customers. So, your credit history may not even matter to them. They will be willing to get you on board. Before you make up your mind with a yes or no, here are some insights that can help you in your decision-making. 

Understanding store credit cards

These are also known as retail cards because retail shops deal in them. You can use some retail cards at the concerned stores or the partner shops, and others at different locations that belong to the card’s network. This one works like a Mastercard or Visa. What makes this card most attractive is the discounts. You can expect to enjoy 15 or 20% off on your first shopping after becoming a member. With some cards, you can even continue to get specific preset discounts. Besides, you can also earn loyalty points or cashback for every dollar spent at the shop. These are redeemable.

The store credit cards, however, may not offer you higher credit limits like typical credit cards. Their annual charges can also be more. Hence, you can expect to get a credit limit of around or even less than a few thousand. Generally, these cards come with an annual interest rate of 24.99% on average compared to credit cards, which include 16 to 17% charges. Hence, you can find them costly in the long-term.

Experts believe that you should consider getting one only if you can pay your balance on time. After calculating all the charges and benefits, if you find that annual fees for a card can exceed the value of rewards and discounts, then staying away can be better. It doesn’t make sense to pay 25% interest fees for enjoying 15% one-time discount rates.

The advantages and disadvantages of store credit cards

Like a coin, this can also have two-sides – positive and negative. Let’s first look at the drawbacks before going into the upsides. 


  • As already informed earlier, these types of credit cards usually come with higher interest rates of 24.99% approximately. If your balance is more, then your interest payments can exceed the value of your offers and rewards.
  • The lower credit limit may put you at the risk of exhausting 30% or more of it, which in turn, can affect your credit history.
  • Some retail credit cards allow you to use only loyalty points, rewards, or cash back at their stores.
  • Since these credit cards are for loyal customers, stores keep updating you about their discounts, sales, and promotions through emails and SMS. If you are not careful with your shopping habits, you can give in to the temptation easily. 
  • You may not pore through the terms and conditions while signing up for an in-store card because of the time crunch. Therefore, you may fail to calculate its costs.


  • One surefire thing is the discounts and introductory offers that you can avail on your shopping as a cardholder.
  • Qualifying for a typical credit card can be challenging, but you can get this quickly.
  • You can use this alternative financial tool to repair your credit score. The stores send your payment records to credit bureaus. That means if you pay your bills timely using these credit cards, you can increase or repair your credit ratings effortlessly.
  • Store credit cards come with many perks for shoppers. These may include free of cost shipping or alterations, an extended period for returns, birthday gifts, and others.

How to decide whether you should opt for it or not?

It depends on you. It will not be a wise idea to take a store credit card if you cannot control your overspending habits or you have debts. Also, if you keep balance, you will likely incur substantial interest fees along with damaging your credit history. The high annual rates and low credit limit can be another risky area. Considering different scenarios, you can better perform with a personal loan or a general credit card that charge lower interest rates.

If you need to weigh your options, then understanding the annual fee for your store credit card is a must. You can compare it against all the savings you can make through sales, discounts, and rewards. In this context, you can also check coupons or reward cards. If retail credit cards don’t fit in your needs, you can explore Visa, Amex, or other such options.

However, if you are sure you can manage your credit like a responsible shopper, then there is nothing to fear. The discounts, loyalty points, and rewards can deliver actual values. It is just that you would need to clear your balance on time. Another thing is identifying your shopping requirement. If you shop most of your items from a particular store, then opening an account with them should not be a problem. It will only ensure considerable discounts.  

Also, there are some store credit cards, such as Fingerhut, that don’t charge any annual fee. You can take one of their cards to improve your credit limit and bring down your credit card usage rate. It can help you build your credit score also. As a smart shopper, you can do first-time shopping with it for discounts, pay your bill, and keep the account running. Don’t use it again if possible.You have got an idea that you can benefit from a store credit card only when you can honestly identify your shopping behavior and spending habits. If you think you can give it a go, then opening a Fingerhut credit account or somewhere else can prove advantageous.

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