How Does the Kohl's Credit Card Work: Benefits and Rewards

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 largely known 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 Kohl's Card is a retail charge card, which means it can only be used for purchases of Kohl’s merchandise. That includes purchases made in Kohl's stores and online. That's different from a traditional credit card that bears a Visa, Mastercard, American Express, or Discover logo.

As with most retail cards, the Kohl's Card comes with a store credit limit that is typically lower than the credit limits issued on regular credit cards. The amount of credit issued depends on the credit standing of the cardholder and can range from $300 to $3,000, though it tends to be under $1,000 for most people.

Because 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 variable annual percentage rate (APR), which was 30.74%, as of April 2023. The card does not charge an annual fee, though you may pay a late fee or returned payment fee.

Kohl's Card Benefits and Perks

The Kohl's Card isn't a rewards credit card. However, you can still earn rewards on purchases if you're a member of the Kohl’s Cash rewards programs. Kohl’s Cash allows shoppers to earn credit toward purchases. For example, you can earn $5 of Kohl’s Cash when you spend $50 on merchandise. Additionally, Kohl's has offered promotions for new cardmembers, such as a 35% discount on your first purchase using your new Kohl's card.

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 same as all shoppers can. 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 Valued Customer by spending more than $600 during the year, you receive six additional discount offers, including an annual birthday gift and free shipping promotions.

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. Because of 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.

A retail store card like the Kohl's Card could be a good option for someone who is new to building credit or trying to reestablish positive credit history. Retail store cards are typically easier to qualify for than traditional credit cards are.

Kohl's Card Pros and Cons

In terms of the pros, the most attractive feature of the Kohl's Card is the initial discount that's available to new members who are making their first purchase. If you plan to purchase a pricier item from Kohl's, the discount could add up to some substantial savings.

After that, there is no real benefit of having a Kohl’s card other than its 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.

In terms of the downsides, it's important to 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.

Additionally, retail store cards are often issued with low credit limits, which is not necessarily a bad thing because it can keep you from overspending. 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 if you don't shop there often. You might consider using a rewards card that allows you to earn cash back on all your department store purchases instead.

The Bottom Line

The Kohl's Card is similar to other retail store cards when it comes to features, benefits, and costs. Adding a retail store card to your wallet could help you build credit, though a secured credit card could be a better option if you can come up with the cash for an initial deposit. Before applying for the Kohl's charge card or any other retail store card, consider how often you plan to use it and how likely you are to pay your balance in full to avoid steep interest charges.