The Pros and Cons of Store Credit Cards


    If you regularly shop at the leading retailers, you will have been offered a store-branded credit card promising you a host of benefits and incentives for continuing to shop there. However, given the number of such offers you have the opportunity of receiving and the fact that you may already have a credit card or two, you should know if you should get yourself a store credit card.

    Types of Store Credit Cards

    Retail credit cards may be either closed-loop or open-loop. A closed-loop store credit card can be used only to pay for purchases at the store or chain that issued. However, with an open-loop credit card, typically issued by card companies like Visa and MasterCard and co-branded with the store, you can pay for transactions at any store in the card network. Both the cards work in the same way as a conventional credit card. All purchases in a cycle period are payable by the due date, typically three weeks or so after the statement period. In case you pay only the minimum amount and roll over the balance to the next statement cycle, you will pay interest charges on that amount. By paying the statement due in full every month, you will not have to pay a single cent in interest.

    Benefits of Store Credit Cards

    Most store cards will not only offer you a discount when you sign up but also give special discounts on purchases on an ongoing basis. Check out the home depot credit card offers here. Typically, a store card will also offer more reward points for shopping at the store compared to purchases elsewhere. You will usually be able to redeem your reward points earned elsewhere on the card when making purchases at the issuing store. Store cards also offer their subscribers a host of other benefits like free expedited shipping, access to exclusive products, special financing schemes, and extra time for returns.

    Drawbacks of Store Credit Cards

    Many times, the rate of interest on a store card is higher than other credit cards making it more costly to rollover amounts, according to Forbes. If you know you cannot pay the full statement amount every month, it may be better to shop around for a card with a lower APR. The rewards program may also not be as lucrative on store cards compared to a conventional credit card. Also, with a store card, reward point redemption is limited to purchases from the store, which keeps you locked to the store. Many conventional cards have better rewards programs that you may take advantage of. A deferred interest promotion may seem great for saving on interest; however, unless the balance is paid in full by the end of the promotion, you will need to pay the entire interest accrued.


    Whether you choose a store credit card or not is a decision you should make after carefully considering your purchase behavior. If you buy regularly at a particular store, it can be a good option for availing of special offers and discounts, however, for non-store purchases, you will be better off with a conventional open-loop credit card.

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