Having a store credit card can be costly if you don't manage credit wisely. These cards typically have low credit limits and high APRs compared to traditional credit cards. For the most responsible and budget-savvy credit users who regularly shop at the same stores, the perks of store credit cards can pay off. Here are seven stores whose credit card deals are worth a look.
Target's RedCard is a store credit card that offers a 5% discount on just about all your Target purchases. It doesn't offer discounts on prescriptions, clinic services, eye exams or Target gift cards. Instead of having to wait to get cash back after your current billing cycle ends, Target gives its customers an immediate discount at the register. The 5% discount also works on Target.com where the card will gets you free shipping with no minimum purchase requirement. The card has no annual fee, and if you use it to purchase prescriptions, you'll get a coupon worth an additional 5% off a day of Target shopping after you fill five prescriptions.
If you don't want to use cash, your debit card or a check when you shop at the warehouse, you'll need to carry the one credit card Costco accepts: American Express card. Costco offers the Costco American Express card that comes in two flavors: a personal card and a business card. The personal card offers 3% back on all gasoline purchases of up to $4,000 per year, 2% back on restaurants and travel, and 1% back on everything else. These cash-back percentages apply to all purchases, not just those made at Costco. The business card gives consumers 4% back on gasoline purchases of up to $7,000 annually. The other rewards are the same. Cash back rewards for both cards are distributed once a year in the form of a coupon redeemable at Costco for merchandise or cash. Neither card has an annual fee.
The Lowe's credit card can be used in one of two ways. You can use it to get 5% off every purchase, or you can use it to finance purchases of $299 or more at 0% for six months. The 5% discount can't be used on services, gift cards or certain high-end appliance brands. If you're using a Lowe's coupon or military discount, you can't combine it with the 5% discount.
Home Depot also offers 0% financing for six months on purchases of $299 or more. Both Lowe's and Home Depot require consumers to make minimum monthly payments during the six-month offer period. Home Depot does not offer the alternative of a 5% discount with its card.
The Kohl's card differs from other store cards in that it's a charge card, not a credit card. It offers extra discounts of 15% to 30% off all merchandise 12 times a year instead of a set reward or discount every time you make a purchase. If you spend at least $600 annually, you'll also get to choose six additional savings days per year.
With the Express Next credit card, for every $1 you spend, you earn 15 points. When you accumulate 2,500 points, you'll get a coupon worth $10 at Express. Effectively, you're getting 6% back on your Express purchases. After you earn 7,500 points in a year, you become eligible for A-List benefits such as free standard shipping on Express.com orders and a higher cash-back rate of $15 per 2,500 points accumulated. Occasional bonus point opportunities make it possible to accumulate more points with less spending. You can also earn Express Next rewards without signing up for the credit card; you'll just accrue rewards at a slower rate.
The credit card for the Gap family of stores (Gap, Old Navy, Banana Republic, Athleta and Piperlime) offers five points per $1 spent. When you accumulate 1,000 points, you'll get a reward certificate worth $10. You'll also get 10% off at Gap, Old Navy and Piperlime every Tuesday. Your first purchase with the card comes with a 20% discount and double points. After you spend $800 in a year, you'll get free shipping on every online purchase and a 15% off "Choose Your Own Sale Day" coupon. If you get the co-branded Visa card instead of the store-only card, you'll also earn one point per $1 spent on your non-Gap purchases.
The Bottom Line
Keep in mind that the rewards you earn from store credit cards are not like the rewards you earn from traditional credit cards. The "cash back" can only be spent at that store, so it's not a true cash back, just a discount on future shopping. Nonetheless, if you make a significant amount of your purchases at a single store, signing up for the store's credit card can make sense as long as you watch your spending and always pay your balance in full and on time.