Kohl’s Department Stores, a subsidiary of Kohl’s Corp. (NYSE: KSS), is the second-largest retail chain in terms of sales, behind Macy’s Inc. (NYSE: M). Kohl's is known largely as a family-friendly store that offers quality clothing products at a low cost. It has cultivated a loyal following of shoppers through its frequent discount promotions, offering coupons for as much as 35% off of store items. Like most major retail chains, Kohl’s offers its own branded retail store card that can be used only at Kohl’s stores and at Kohls.com.

How the Kohl’s Credit Card Works

The first thing to understand about the Kohl’s credit card is that it is a retail charge card, which means it can only be used for purchases of Kohl’s merchandise. As with most retail cards, it is issued with a store credit limit that is typically lower than credit limits issued on regular credit cards. The amount of credit issued depends on the credit standing of the cardholder and ranges from $300 to $3,000, though it tends to be under $1,000 for most people. Since the Kohl's credit card is a charge card, the balance is expected to be paid in full each month, but cardholders can carry a balance if they are willing to pay the hefty variable annual percentage rate (APR), which was 24.99%, as of June 2020. The card does not charge an annual fee.

Cardholder Benefits and Perks

Kohl’s does not offer a rewards program with its card. However, it does offer rewards programs for its shoppers through its Kohl’s Cash rewards programs. Kohl’s Cash allows shoppers to earn credit toward purchases. For example, shoppers can earn $5 of Kohl’s Cash when they spend $50 on merchandise. Kohl’s Cash promotions are offered periodically and are sometimes available only to Kohl’s cardholders. Kohl’s allows for discounts and promotions to be stacked on top of each other, which can result in tremendous savings. For example, a customer may combine a 30% discount offer with Kohl’s cash on any purchase. Kohl’s often offers cash-off coupons, such as $10 off purchases of $30 or more. These may be combined with other discounts, as well as Kohl’s rewards programs.

Kohl’s cardholders participate in all of these discounts and rewards programs the same as all shoppers. However, cardholders receive additional offers for store discounts of 10 to 30% each year. In addition, Kohl’s gives new cardholders 35% off their first purchase, which can be combined with any other store discounts. If you become a Most Valuable Customer by spending more than $600 during the year, you receive six additional discount offers.

Who Uses the Kohl’s Card?

Kohl’s has cultivated a loyal following of shoppers through its discount offerings and shopper rewards programs, which, when combined, can result in big savings. The offer of 35% off the first purchase, on top of all other discounts, using a new Kohl’s credit card is enticing for many shoppers. After that, there is no real benefit of having a Kohl’s card other than the special discount offers throughout the year. For Kohl’s shoppers who thrive on the ability to stack discounts, that may be enough of a reason to have it. For people who do not shop at Kohl’s frequently, a regular cash back rewards credit card might serve them better.

What to Know About the Kohl’s Charge Card

Keep in mind that the Kohl’s charge card is a retail store card. Retail store cards have several drawbacks, including the fact that they are generally issued as subprime credit, meaning that you pay a high APR if you carry a balance. Retail store cards are issued with low credit limits, which is not necessarily a bad thing. However, if you are used to receiving $5,000 credit lines from a credit card issuer, you might be disappointed in the credit line you receive from Kohl’s. Finally, because it doesn’t offer a rewards program outside of the one available to all shoppers, the Kohl's card may not be of much benefit to you. You might consider using a rewards card that allows you to earn cash back on all your department store purchases.