Clothing chain and perennial mall staple the Gap, Inc. (NYSE: GPS) launched its retail credit card in 2007. The card offers numerous perks and rewards for frequent customers, but there are some downsides and caveats of which potential users should be aware. Its chief competitor credit cards are Lane Bryant and Victoria's Secret.
- Gap owns several well-known clothes retailers, and it launched its own store credit card in 2007 that works across all of its brands, in-store or online.
- Cardholders receive reward points and discounts for use at The Gap and affiliated locations, including a sign-up bonus and various status levels achieved through increased purchases.
- The card is issued in partnership with Visa and so can be used at any other store that accepts credit cards.
How the Gap Credit Card Works
The Gap's credit card, called GapCard, comes in different versions. The most basic option is a store-only card that can be used at Gap stores as well as Banana Republic, Athleta, Old Navy, and Intermix. It can also be used for online purchases.
Consumers can also apply for a Visa-affiliated Gap card. This card can be used anywhere Visa is accepted and accrues bonus points for the Gap rewards program, albeit at a slower rate than at Gap family stores. Visa cardholders can get cash advances for a 4% fee or a minimum charge of $10, whichever is greatest.
Rewards and Benefits
New cardholders receive a 20% discount on their first purchase of Gap merchandise. Purchases made at the Gap family of stores accrue points at a rate of one point per dollar spent. Visa-enabled cards used for purchases at non-Gap stores receive one point per dollar spent. These points can be redeemed for $5 rewards per 500 points which effectively gives all Gap store transactions made with the card a 5% discount.
Cardholders also receive a number of perks and offers to participate in special events. These include special offers to earn extra rewards points on Tuesdays with an additional 10% discount on all merchandise, birthday bonus offers, and a waiver on the company's return receipt policy.
Upon reaching certain milestones, members will unlock higher membership status levels with additional benefits based on the total Qualifying Purchases. There are three levels:
- CORE: < $500 in annual brand spend
- ENTHUSIAST: Cardmembers start at the Enthusiast level and Members reach this level with a $500-$999 annual spend
- ICON: 5,000+ points as a Cardmember or $1,000+ in annual brand spend
Who Benefits the Most?
People who shop at the Gap family of stores frequently benefit the most from this card, especially those who qualify for status upgrades. The bonus point boost makes a difference for those who primarily rely on Gap stores for their clothing needs.
Nordstrom and American Eagle Outfitters are the main competitors that offer retail reward credit cards.
Like Gap, Nordstrom, Inc. (NYSE: JWN) offers cards with and without Visa affiliation. Cardholders accrue two points per dollar spent at Nordstrom, Nordstrom Rack, and HauteLook in stores and online. Visa cardholders earn one point per dollar spent elsewhere and get $20 vouchers per 2,000 points. Cardholders also get early access to sales events, reimbursement by voucher for in-store alterations, and special triple-points days. New cardholders also get a promotional voucher when signing up, depending on the promotion available at the time, credit approval, and the amount spent on the first purchase.
The American Eagle Outfitters (NYSE: AEO) branded credit card comes with and without Visa affiliation. AEO offers 25% off the first purchase, with some restrictions, and gives 15-20 points per $1 spent at AEO or AEO-affiliate Aerie. Visa cardholders also get five points per $1 spent elsewhere. Cardholders also get a 15%-25% extra birthday discount.
The Gap Credit Card Interest Rate and Terms
The initial discount only applies to Gap brand merchandise. No third-party products are eligible. Discount Tuesdays do not apply at all Gap family stores. Old Navy, Banana Republic, Athleta, and Banana Republic Factory Stores are all excluded. The annual percentage rate (APR) is 25.99%, which is almost 10% higher than the average credit card issued by banks.