See: How Store Credit Cards Are Different From Regular Credit Cards

Susan Kelly

Oct 10, 2023


The most typical variety is a gift card to a particular store. The My Best Buy Credit Card and the Target RedCard Credit Card are only two examples. On the contrary, traditional credit cards can be used by any retailer that participates in the payment network to which they are linked. A generic greeting card can serve as an acceptable middle ground. These cards are issued by conventional credit card firms, which have established relationships with a wide range of retailers. They work like store credit cards in that you get extra rewards at the store of issue, but they may be used everywhere Visa is accepted.

Limited Use

Unless co-branded, store-issued credit cards can only be used in the issuing store or chain. Credit cards bearing the Visa, MasterCard, or American Express logo can be used practically anywhere debit and prepaid cards are accepted, with one significant restriction. Several stores accept co-branded credit cards and their shop credit card. It's possible to use a general-use credit card or a store-branded co-branded credit card anywhere that takes the card type. These cards operate similarly to standard credit cards but typically provide more significant rewards for purchases made at the associated establishment.

Higher Interest Rates

Most retail credit cards have far higher interest rates than regular credit cards. According to The Balance's weekly credit card interest rate analysis as of July 31, 2020, the average annual percentage rate (APR) for a store credit card was 24.15%, while the APR for all credit cards was 20.09%. When carrying a balance from month to month on a credit card with a high-interest rate, you will pay more interest and take longer to pay off the debt than if you used a credit card with a lower rate. Interest rates on store credit cards, even those that aren't co-branded, are higher than those on generic credit cards.

Restrictions on Rewards

Retail store credit cards don't always make it easy to cash in on rewards. Only purchases bought there will count toward your reward total. Once you've earned enough points to cash them in, you'll only be able to do so at the physical site where you made them. Sometimes, you'll need to pay with credit to get the reward. A co-branded store credit card will allow you to accumulate points on all transactions, but you'll see the most value in using it there. It's still possible that your redemption options will be limited to anything like a store-specific certificate or discount.

0% Interest vs. Deferred Interest

Store credit cards do not offer attractive annual percentage rate (APR) benefits, such as a 0% introductory APR term. Alternatively, you might look for a deferred interest promotion, frequently offered by shops selling pricey items. After the promotional period ends, if you still owe money, interest will be charged on the unpaid balance unless you pay it in full. If there is a balance at the end of the promotional period, interest will be applied retroactively to the beginning of the period. The only good you'll pay during an accurate 0% APR deal is the debt you carry over from the promotional period.

Credit Limits

Credit card limits at most stores are significantly lower than those at other types of cards. In most cases, the minimum credit limit for a retail credit card is $300 or $500. You can quickly max up your favorite store's credit card in one shopping trip if it has a low limit.

Impact on Your Credit History

Using a standard credit card is preferable for your credit history. A shop credit card could be a good alternative if you either have no credit history or are actively working to improve your credit score. Using store credit cards can enhance your credit score, but only up to a point. To establish a solid credit history, you'll need to apply for a big credit card, even if it's a retail credit card with a co-brand.


Store credit cards and credit cards share many similarities at first glance. Either one can be used to make immediate purchases with flexible repayment terms. Store cards can often get you exclusive deals and discounts at participating retailers. However, retail credit cards often have higher interest rates and can be used only at the issuing store. Some consumers like to have both a rewards credit card and a shop card for their go-to retailers. Your credit card's rewards program will continue to function normally for all other purchases. If you decide to carry debt, interest will eat up whatever earnings you would have made.

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