Which Is Better: "Store Cards" Or Store Branded Visas?

It has now become common for store to offer, in addition to their regular store-brand credit card, a co-branded Visa, Amex or Mastercard.

But which should you chose? Bankrate breaks it down:

Private label:

Easier to qualify.
One high APR for all.
Low credit limit.
Use only in one store.
Rewards for shopping in store.

Co-branded cards:

APR depends on credit rating.
Variable APR, lower than private label.
Credit limit depends on rating.
Use anywhere.
Rewards for shopping anywhere.

Generally speaking the co-branded cards are a better deal, but some people prefer the store cards because they have low limits and are easier to get. We’ve never felt the need for a branded credit card aside from the occasional no interest deal (that we paid off within the interest free period.) Do you find that the deals are worth it?

Target card or Target Visa? Which is better? [Bankrate]
(Photo:Jeremy Brooks)


Edit Your Comment

  1. Rando says:

    APR depends on credit rating. – Wrong, depends on the merchant and what they want to do with the card..

    The only good thing about getting a Cobrand card when applying for a store card is you get two cards with one credit check. Other than that, they aren’t worth it. Store cards are rarely worth it also.

  2. I use two co-branded cards. Wawa for my gas, and Shoprite for my groceries. Wawa is 4%back on gas, and 1% on everything else paid out in Wawa gift cards(I usually sell my $50 card for $40 to someone). Shoprite is 3 points per dollar for Shoprite branded items, 2 points per dollar spent at Shoprite, and 1 everywhere else. It allows me to get their giftcard in addition to others.

    I need gas and food. I pay off on time, and have not only improved my credit, but have gotten some pretty good rewards.

  3. humphrmi says:

    It should be noted that store cards also often have terms in their contracts that CoBrand and just plain regular credit cards don’t have – for instance, when you buy anything with a Sears card, they (Citi now) hold a lien against the product you purchase until you pay it off. If you carry a balance perpetually, they maintain a lien against everything you buy, pretty much forever.

    This probably doesn’t matter much unless you’re going to declare bankruptcy (and guess which company has the biggest legal team presence at meeting-of-creditors…). Still, good to keep in mind. They also of course have the option of sending out an off-duty sheriff to pick up your Craftsman table saw if you default.

  4. MingusSzabo says:

    i’ve heard anecdotal evidence that health insurance companies with raise your rates or drop you if you open a department store credit card account.

  5. chartrule says:

    USA today has an article related to this ;


    (hopefully that takes you to the piece and not their homepage)

    one of the things the piece says is ….

    stores are “looking at all sorts of alternatives to keep down the ever-increasing Visa-MasterCard fees.” Visa and MasterCard charge a fee equal to 2% of every transaction, which will cost retailers up to $26 billion this year, he says. When stores offer cards that are co-branded with Visa or MasterCard, they save some money in fees. When they offer their own cards, they avoid the fees completely.

    “The cost of accepting other cards is so great that retailers can provide very significant benefits to consumers if they are willing to use their cards,”

  6. krunk4ever says:

    If you’re making a big purchase, that one-time 10% off when you sign up for a store credit card might be worth it.

  7. krunk4ever says:

    @krunk4ever: To clarify myself, not all store branded credit cards have the 10% off for sign up, but many do (e.g. Target). Others like Amazon.com and Buy.com have $30 off your purchase for signing up. Most typically have some sort of attraction to get you to sign up.

  8. stpauliegirl says:

    My first credit card ever was a Target Card (in-store only) with a limit of $200. I used it about once a month for regular household purchases at Target and paid it off every month, and within a year it became a Target Visa, my current and only credit card. As I used it wisely, the credit limit increased nicely, and it has been the only card I’ve ever needed. The deals aren’t that great, just a 10% off coupon per every $1,000 spent, which I always manage to lose before using whenever I get one every blue moon, but I appreciate how they helped me build credit. Well, and I do like getting the Target holiday catalog in the mail too. :)

  9. stpauliegirl says:

    @krunk4ever: My husband has an Amazon Visa, and I like their deals much better than Target’s 10% coupons (both for the first purchase and earned with additional purchases). We use the Amazon Visa only for shopping at Amazon and large household purchases, so we rack up quite a few $25 gift certificates at Amazon. Free money is much better than some weak coupon!

  10. Ailu says:

    “Which Is Better: “Store Cards” Or Store Branded Visas?”

    You forgot one other choice: How about “None”?

  11. warf0x0r says:

    I have a Banana Republic card that I use at their stores, recently the opened it up to Old Navy and the Gap, its a great way to buy stuff that’s on sale and get 5% back in gift cards that I save until Christmas and redeem all at once, but then the decided to offer a BR visa and their gift card offers have a very short expiration period now. I opted out of the upgraded visa.

  12. Parting says:

    @Ailu: Depends on what you are looking as rewards. As long as you pay at the end of month everything you own, rewards are a good bonus.

  13. ShadowFalls says:

    Store cards are bad for many reasons. The low limit is bad for your credit ratio, and the APR is really high on those as well. YOu can not just use them anywhere either, and do not come with the numerous perks of Visa or Mastercard.


    It really depends on your uses. Amazon does hold good deals, and surprisingly has good customer service too. For Target, those 10% coupons come real handy for a Super Target. That way you can do some real grocery shopping.

  14. EmmaC says:

    I get my prescriptions at Target so for me it was totally worth it. With every 10 prescriptions I get a 10% store coupon off everything–including the copays on my prescriptions. Combined my family and I get about 10 prescriptions a month (mostly due to my health condition) so every month I usually get a 10% coupon. Plus Target happens to be one of those stores that sends you a lot of coupons if you are a cardholder. I get lots of great coupons from them on items I really use in addition to my 10% off. I have the store card and have been offered repeatedly if I want the Target visa card, but I don’t need it. I use my Target card only at Target, pay it off every month, and I use other rewards cards elsewhere.

  15. EmmaC says:


    I use my 10% off to stock up on groceries as well. I don’t have a Super Target but I buy a lot of my non-perishable foods at Target.

  16. stpauliegirl says:

    @ShadowFalls: That’s true; I’ve never thought of doing a big grocery haul with my 10% coupon, even though I live by a big SuperTarget. I’m not normally the type to buy a bunch of groceries at once, but I’m going to try to do it the next time one of those coupons rolls around! Thanks!

  17. I have an REI visa, which for my purposes, is worthwhile. I do a lot of outdoor activities, and buy a substantial amount of equipment from them, but I also buy almost all my clothes and shoes there, as well as gifts for friends with similar interests. REI has a reputation for being expensive, but with the 10% back I get at the end of the year and their great sales, I do pretty well there. Moreover, they have the most liberal return policy you will ever encounter, which I make good use of.

    So here is the breakdown: no annual fee (theres a onetime $15 signup fee to become an lifetime REI member, if you aren’t already, but you get a $20-$35 gift card upon signing up for the credit card). I *think* my interest rate is 17%, but I pay off my balance every month, so I don’t really remember. 10% back on non-sale REI purchases, 5% back on REI sale items and services (snowboard waxing, clinics, etc), and 1% back on everything else.

    The dividend comes at the end of the year in the form of store credit, but you can request to have them send you a check if you prefer that.

    So…even if you never set foot in an REI, you get a reasonable interest rate (for a credit card), no annual fee, and 1% back on everything. Also, the card is through USBank, which provides many more free online services than BofA and other banks, and generally fewer fees. My experience of customer service has been good, thus far.

    The only other store cobranded card I’d go for is the Costco AmEx. I’m single and don’t shop there enough for the card to be worthwhile (I already have an AmEx), but if I were married and had a family, I would probably get one.

  18. alice_bunnie says:

    I have store cards (Macy’s, Kohls, JCPenny, Belks) and use them for times when they have specials for card holders like coupons and % off and pay them off immediately. Bought my mattress at Macy’s and got 0% interest 6 months. I also have Home Depot, Lowe’s and Circuit City and only use them for 0% interest offers.

  19. yg17 says:

    I have the Amazon Chase Visa and I like it. 3 points at Amazon, 1 point everywhere else. 2500 points=$25 gift cert at Amazon. I’ve gotten several of them over time. I always put large purchases on my card and then pay it off immediately. The APR is 14.9% I think (it’s definitely 14.something) but it doesn’t matter since I pay it off every month. Chase’s customer service has treated me well

    Although, since I’m getting a new VW GTI next month (actually, since it’s past midnight here, this month, woot!!!), I’m seriously considering the VW Chase card…..the points can be used towards maintenance which will probably come in handy more than the Amazon gift certs. But that’ll be my 3rd credit card, and I’m not sure if I want another one (I also have an HSBC Mastercard which I never use because their customer service is terrible and I’d rather they not get a portion of the processing fees, but of course, I don’t want to cancel it either since my credit will take a hit).

    I personally wouldn’t bother with a store-only card. The credit limits are low and the APRs are ridiculous. When I worked at Target and put in people’s applications, when they got the Target-only card, the limit was usually somewhere in the neighborhood of $500-1000 and the APR in the mid 20s. FWIW, the people with good credit got the Target Visa (and their credit determined limit and APR) and the people with crappier credit got the Target-only card. Unless you specifically requested the Target-only card, which is a dumb idea if you do have good credit.

  20. Leah says:

    @rhesuspieces00: *nod* I love my REI visa too. And I have a sky high limit — literally. I kept paying my card off every month, and they kept raising my limit, despite the fact that I only make $20k a year. They’ve now removed my limit cap.

    And I really like the bonuses. I too do a lot of outdoor stuff, but I don’t have a ton of money for buying gear. Having the REI visa lets me use my dividends (from buying groceries and gas on my card) to continue improving and adding to my camping gear.

  21. parliboy says:

    I have two store cards, both through furniture stores. I got them when I made large purchases during “buy now and pay no interest until 20XX” campaigns. They both have $4,500 limits, which, now that the purchases are paid off, are good for sitting there for calculating how much credit I have available versus debt — a factor in your credit score.

  22. gingerCE says:

    I would give a word of warning about store branded cards. Know who the bank is that is sponsoring the card. The Target card’s bank is Target, so you know who you are dealing with if you have a problem.

    I had a Banana Republic and Gap card. I noticed a problem on my credit report pertaining to my Gap card. No problem right? I call Gap, they refer me to GE Money Bank, who say I have to deal with Gap since Gap is listed as the creditor on the report and not GEMB. I call Gap again, they say I must talk to GEMB. The other problem is I got my card prior to GEMB taking over Gap cards–so it’s another bank also listed with Gap on the credit report–but I can find no contact info for that bank. When I asked Gap who that bank was they said it was GEMB just called a different name but once again GEMB denies knowing anything about that and is admanant since Gap is the creditor listed on my report for my Gap card, GEMB can’t make changes on my report–only Gap can, but again Gap says it’s GEMB. It’s a nightmare.

  23. MyCokesBiggerThanYours says:

    You’re joking right? NO CARDS is the only solution. When will you people learn!?

  24. ElizabethD says:

    I love my Kohl’s charge (not credit) card, which I pay in full every month so as not to incur interest charges.

    I get awesome deals and cash-backs on their already awesome sale prices. I use it to buy staple items for our wardrobes: jeans for the two teenagers, bras on sale for daughter and me, Dockers khakis for hubby, bath towels, bathing suits, socks, boxers.

    With the weekly sales plus extra discounts that Kohl’s mails me because I’m a charge customer, I sometimes feel I’m almost stealing from them. Ha ha, I know, that would be a joke. But still, I do find it worthwhile for our family’s particular needs.

    But I won’t open a charge at another store. It just feels too risky in terms of spending.

  25. quail says:

    The in-store credit card is the easiest thing for someone without credit to get (used to be at one time at least) and with it build credit. My first card was a Sears card. Used it for car repairs and some interviewing clothes. Since then moved up to the majors and never used a store credit card since. Recently got into a credit union and got a low interest card through them. Best move I’ve ever made.

  26. RvLeshrac says:


    In-store cards vary in difficulty. There’s really no difference between “store cards” and “co-branded cards,” financially, because the store card is *still* issued by a bank. Co-branded cards will also contain the same types of agreements (many contain ‘no chargeback’ policies for the brand) as store-branded cards. That and the ‘where you can use it’ policies are really the only difference.

    You can qualify for some store-branded cards if you’re homeless, while others may not qualify you unless you make 6+ digits and have an 800.

  27. shades_of_blue says:

    I’ve got Bonton and Gordon’s Jewelers cards, in both cases I saved an additional 10% for signing up, when I made two large purchases. Both of which I paid off before incurring any interest.

    IMO That’s the best reason to get a store branded card, for additional savings. Beyond that, I’ll stick with my Wachovia branded Visa. They’ve treated me nicely, unlike Chase MC. But that’s another story altogether.

  28. SadSam says:

    We both have Home Depot cards which we used several times (before we stopped using credit) to take advantage of the 0% float for 6 or 12 months on home improvement supplies (plus 10 – 20% off) for our investment property. We went with HD credit cards instead of taking out a home equity line of credit and it worked well for us. We kept close track of the expiration dates for the 0% always paid the minimum monthly amount on time and paid it all off before the deal expired. Now that we are off credit cards all together we just pay cash for our supplies which, of course, works the best (nothing to keep track of). Home Depot issues its credit cards thru CitiBank and while I have had all kinds of problems with CitiBank credit cards over the years the HD cc worked well for us. Even though we are off cc we might take advantage of the Home Depot cc 10-20% off deal in the future but we’d have cash in the bank to pay off the bill.

  29. anatak says:

    Q: Which Is Better: “Store Cards” Or Store Branded Visas?
    A: No.