The only reason I’d get a store credit card

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Store credit cards have their downsides, but sometimes they can be a good bet.


Key points

  • Typically, store credit cards charge high interest rates and can only be used at a specific retailer.
  • Although I don’t normally request these cards, there is one situation where I would make an exception.
  • If you frequent a store regularly and the rewards offered are better than your other cards, it might be a good idea to sign up for a store card.

I’ve been using credit cards for a long time now, and I know that one of the biggest perks is getting cash back on purchases you make. Some people take this money and use it to boost their savings. I tend to get my money back and use it to pay for outings or family trips because I have my savings on autopilot and I’m on track with them.

Meanwhile, even though I have my share of credit cards, I try to be judicious when asking for new ones. And to this day, I’ve never had a store credit card.

A store credit card is tied to a specific merchant. These cards may be easier to obtain than regular credit cards, but they also tend to come with higher interest rates.

Plus, with store credit, you’re limited as to where you can use it. Meanwhile, every time you apply for a new credit card, your credit score takes a little hit. So I generally like to stick with credit cards that aren’t store specific because they’re so limiting.

But for the first time, I’m actually thinking about opening a store credit card. Here’s why.

It’s all about the numbers

My current credit card — the one I do most of my shopping on — offers generous cash back rewards for gas and other essential purchases. But when it comes to cash back on retail purchases, I only get 1%.

In the meantime, there’s a store that I tend to go to because that’s where I buy a lot of clothes for my kids. And I recently learned that opening a store credit card will give me 5% cash back on my purchases as store credit. It would also give me discounts on in-store purchases during promotional periods.

Recently I went through my credit card statements to see what I spent at this store on a monthly basis. Now a warning – I recently had to restock my kids entire summer wardrobe, as they managed to top everything from last year. My expenses over the past two months have therefore been higher than usual. But all told, I spent about $100 a month at this store before my big shopping spree. And 5% back would mean getting $5 back a month to use at that store.

In contrast, my favorite credit card only refunded me a dollar on those purchases. Granted, it’s $1 that I can redeem for real money, whereas the cash back that the store card gives can only be redeemed for store merchandise. But given how often I shop at this store, I think at this point the store map just makes sense.

A good choice for me

I plan on not applying for my store card until I’m ready to buy back-to-school clothes for my kids. Sometimes you get extra cash back on your first purchase when you open a store credit card, so I think I might as well do this at a time when I have a lot to buy.

As a general rule, I always plan to stay away from store credit cards. But in this situation, it seems like signing up is a good idea. And while the interest rate on that store card is probably astronomical, if I watch what I spend and pay my bills in full each month, I won’t accrue any interest, so it won’t have to be a publish.

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