Say No To (Most) Store Credit Cards

Holiday Cat here. My cousin Tax Cat is out shopping, so I thought I’d pop in and offer some helpful tips before he comes back with his calculator and thick glasses and ruins everything. So, shoppers, let’s talk about store cards. Specifically, let’s talk about they kind of suck.

Sure, you may be promised an instant discount of 10%, but if you don’t pay off your balance each month, you can be hit with interest rates of up to 29%.

“Store charge cards can be very expensive if you don’t pay the bill in full every month,” said Chuck Bell, Programs Director for Consumers Union, publisher of Consumer Reports and parent company to Consumerist. “Don’t succumb to high-pressure holiday pitches to open up a new store account without carefully checking the interest rate, penalty and late fees, and other fine print.”

If you pay off your balance every month, Consumer Reports has found some store cards worth considering. Barnes & Noble’s card comes with an instant $25 gift card, and up to 5% off of purchases. Cards offered by the Gap, Banana Republic, Piperlime, Athleta and Old Navy come with 15% off on the day they’re issued, and five points for every dollar spent at any of the five retailers.

If you usually don’t pay off your balance each month, you should stay away from all store credit cards. “A store card is not for you if you’ll be tempted to buy more things than you normally would to get more card rewards,” warns Consumer Reports. “Because many store cards charge high APRs, skip them entirely if you tend to carry balances. Instead pick a bank card with the lowest interest rate you can find.”

Store cards with the best rewards [Consumer Reports]


Edit Your Comment

  1. DerangedHermit says:

    Cats can’t type!

  2. pop top says:

    I like Holiday Cat. She seems more festive and playful than Tax Cat.

  3. thompson says:

    I get good specials as a Macys card holder. I couldn’t care less what the APR on the card is. Anyone who is stupid enough to carry a balance on a store card deserves the interest rate, shesh.

    • kaptainkk says:

      Wow! So informative you are. You’re such a tool.

      • thompson says:

        How am I a tool? I’m not one of those “OMG anyone who ever carries a balance on any credit card is an idiot” types. I’ve carried a balance plenty of times, to get through liquidity crunches with my income and such. My point is that I carried that balance on a regular CC with a relatively decent interest rate, not the 29% APR that most store cards have. Carrying a balance is often a necessity, but if you’re carrying it on the store card you are indeed an idiot.

    • BurtReynolds says:

      I haven’t received any specials this year for being a Macy’s card holder. I used to get coupons on the mail that had about 100 restrictions, and now I get nothing.

      Whenever I go there they ask if I want to use my Macy’s card. I ask if I get a discount, they say no, and I use my Discover or Amex. I only opened it for the discount on a piece of jewlery I bought one Christmas.

  4. kalaratri says:

    I admit our household has a few cards for places we shop at the most or places where it gives us interest free financing. We pay everything off every month so I’m not worried about it and we don’t shop with them all willy-nilly.

  5. Mighty914 says:

    Just pay it off every month, and a lot of them can be worth it (and to those who say that isn’t always an option….don’t take any of them).

    I recall buying a very expensive suit and leather coat from Bloomingdales and getting the store credit card, which came with an immediate 15% discount. Considering the amount of stuff I was buying, I saved quite a bit. I cut the card immediately when I got home, paid the bill when it came, and I’m a few dollars richer for it.

    • jason in boston says:

      Agreed. For people that can afford it and are good with money, credit cards rewards can be worth it for some purchases.

  6. pecan 3.14159265 says:

    You know, that B&N mastercard might be worth it if I can get 5% off ALL purchases on, meaning ebooks. As it stands, B&N has stopped offering 10% off on the website with the $25/year membership, and isn’t sending as many coupon codes anymore. I’m not renewing my membership, but I’d be more inclined to buy ebooks with B&N (vs. Google Books) if I can get a discount.

    • TasteyCat says:

      Citi Forward offers 5 points per dollar on locations that report as book stores (including B&N and Amazon), as well as restaurants and movies. For cash, this works out to 3.125%, or if you want B&N gift cards, you can get 4.167%. They also give 6000 points for $250 in purchases in the first 3 months, which equals a $50 B&N gift card, plus another 2500 points for going paperless.

      I just got the card a couple months ago, but I have certainly enjoyed the rewards for my Amazon Black Friday shopping.

    • AnthonyC says:

      On a side note, if you are a AAA member, you get 10% off at

  7. jennesy says:

    I’ve had a Gap card for years and have earned quite a bit in rewards from it. There are also lots of extra discounts for card holders. Just pay off the balance each month!

  8. Portlandia says:

    You CAN get some good deals on store credit cards. When I bought my new house I went to West Elm and bought about $5k in furniture from them. I got 12 months no interest financing AND when you use their credit card you get 10% back in the form of a gift card. I got $500 back and was able to buy some nice linens and other misc things and paid off the balance before th year was up.

    • pecan 3.14159265 says:

      By far, the best reason to open a store account is the discounts on big ticket items. We saved $200 on furniture just by opening an account. It’s the only one we could open though. Everything else that wasn’t from Craigslist was through vintage stores and stores that didn’t offer a line of credit. Still, it freed that cash for other things that we had to pay in full for right then and there and helped us budget for it all.

  9. mike says:

    One thing that’s worth noting is that most store cards have a credit card componant as well. I found this out the hard way.

    I thought when I used my Macy’s AmEx card, it would get charged like any other CC. But nope. Macy’s charges things you buy at macy’s on their store account (assuming to avoid CC fees). I got two different bills with two different due dates. They require two different payments.

  10. Alvis says:

    “Store charge cards can be very expensive if you don’t pay the bill in full every month”

    Also: regular credit cards

    • Coelacanth says:

      Store credit cards tend to be horrific. Try finding one under 20% APR.

      At least with regular credit cards, those with decent credit may still qualify for a significantly better rate – even if it’s still “expensive.”

  11. cvt2010 says:

    Gap/Old Navy etc cards also have frequent discount days (15-20% off usally) for cardholders.

    • Michaela says:

      Yep. I also get cash discounts (like 10 bucks off) a few times throughout the year. I use them to stock up on shirts.

      Overall, I think store cards are great for places you frequently shop. Just ask around before getting one to make sure no cardholders have issues with poor service or benefits that don’t meet expectations.

  12. What’s your problem, Kazanski? says:

    Or you can use them to your advantage. Let’s say you want a new home theater setup. TV, Blu Ray player, surround sound, etc. Let’s say you have a store offering 36 months, no interest. That seems like a no-brainer for me to keep my money for three years while enjoying the new living room.

    Of course, you may have to make monthly payments and pay off the entire balance within those 36 months or get hit with 29.99% interest from the purchase date. Being diligent with your funds can allow you to get free use of someone else’s money while building/maintaining/improving your credit.

  13. Big Mama Pain says:

    The REALLY stupid cards are the membership cards that you have to pay like $20 for and then get 10% off each purchase for the year.

  14. !caybay says:

    I have a Future Shop card because of the no interest financing options. It makes a macbook affordable for me. Read the fine print, do the math, make the payments, and keep it to one transaction so you’re not messing up due dates.

  15. stevied says:

    Back in the day, Gayfer’s had a nice 20% discount with new cards and furniture/bedding.

    Waited for the 50% off after Christmas Sale. Used the Gayfer’s card for another 20%. Combined = 70%..

    Balance came due, cashed in a CD paying 16% interest that was coming due and payed off the balance in full.

    Loved that Gayfer’s card.

  16. ShadowFalls says:

    The discount usage of cards and paying off the balance is a good part of having such cards. The other is the no interest for a certain period. As long as you pay off the cards before you incur interest, you are fine.

    There are times when it can be bad, and times when they can be good. The interesting concept is that the Mastercard, Visa, Discover, or Amex branded store cards, tend to have a higher credit limit and lower interest rates than just the regular store cards.

  17. TouchMyMonkey says:

    Oh, and my former Sears card no longer has a grace period. Interest accrues from the moment you sign the receipt. BEWARE!!!!!!!

    • Snaptastic says:

      I DESPISE the Sears and their stupid card because I thought I had paid it off, as they didn’t send me a bill for 3-4 months. As it turns out, they were mailing my bills to the wrong address (I didn’t move, they just screwed it up). I found out only when they sent a collections agency after me…because calling or looking at my mailing address in my records was probably too hard.

      Only ding on my credit record and I detest them for it.

  18. TasteyCat says:

    The advice of not getting store cards if you carry balance is flawed. The correct advice is buy what you can afford to pay in full.

    I have a couple of store cards. I typically don’t let either of them report a balance, let alone carry one. I haven’t paid them a dime in interest. However, they have provided me with some good rewards while helping my overall credit profile due to decreased utilization, increased age of accounts (JCPenney gave me my first credit card… as with other store cards, they are a lot easier to get than bank cards), and more varied credit mix.

  19. YOXIM says:

    I love store credit cards. They always have specials like 6 to 12 months same as cash. Why would I drop perfectly good cash on a large purchase if I can finance it for a year without paying a dime of interest? I have cards from Guitar Center, Sam Ash, Best Buy, Zales Jewelers, and who the hell knows whom else. Once my 12 months of interest-free financing is up, I don’t use the card unless they have another special offer (which they usually do).

    I’m in a rare situation where I can afford to pay cash for most things I buy. I just choose not to. I have a decent amount of money saved up, but that didn’t happen overnight. Those savings took a long time to accumulate, and I’m not about to just blow it all on a couple of large purchases.

    I do the same thing with regular credit cards. Any time I wanna buy something expensive, I get a credit card that offers interest-free financing. I always pay it off (usually early), and my credit rating just keeps getting better and better. It’s a win-win situation (for me anyway haha).

    You can make credit cards (merchant or otherwise) work for you. You just gotta make sure the terms are favorable to you. As long as these credit card deals keep happening, I’m going to keep taking advantage of them. Why not? Better than it being the other way around.

    • jason in boston says:

      If you are so good with your money (I put everything on credit and pay it every weekend), why not just get a really good amex or visa that has cash back or other rewards?

  20. Coupon says:

    I had two hits against my FICO score from Equifax this year. One was no mortgage and the other was “no store credit card”. WTH?

  21. mbz32190 says:

    Kohl’s is the only store credit card I have. It is worth it for the flood of 20-30% off coupons they send me on a weekly basis. I pay it off as soon as the bill arrives.

    I also have a Target RedCard, but it’s only a debit card that draws from my checking account. 5% off just about everything for no extra effort. (I don’t use regular credit cards except for extremely large purchase).

    • Erika'sPowerMinute says:

      I know, right? I spent $157 this week stocking up on basics for my kids (jeans, socks, tights, undies, a few new things for my growing-like-a-weed toddler) and with the huge sale on everything and the 30% coupon I got in the mail, I “saved” $259. I put that in quotes because that’s of course off regular prices, which no sane person would every pay at Kohl’s. Sale + coupon w/card purchase is the way to go. I got a ton of stuff for not much $ and they’re not getting a dime out of me in interest because I always pay off immediately.

      • lordargent says:

        I’m very anti store card (I only have one credit card and that’s served me well for the better part of 2 decades).

        But that Kohl’s card is damn tempting.

    • bleigh says:

      oh jeez I LOVE my kohls card. I can get so much for such a low price.

    • TasteyCat says:

      I’ve gotten some use out of my Kohl’s card, but it’s one I’m tempted to let go inactive and let them cancel it. The credit limit is an insult, and Chase won’t do anything more than a modest increase even if they pull hard. Maybe it will be better when Capital One takes over. Not that Capital One’s a great lender either.

  22. segfault, registered cat offender says:

    Holiday Cat has no whiskers! Quick, one of you cat fanatics report Consumerist to the ASPCA for cruelty to animals!

  23. PLATTWORX says:

    Um, confusing post. The headline is “Say No To (Most) Store Credit Cards” the story then mentions “If you pay off your balance every month, Consumer Reports has found some store cards worth considering.” and links to a story titled “Store cards with the best rewards”.

    If you are not going to pay your balance on ANY card, picking a card with lowest interest is best. Stores cards are not alone. This is just simple common sense.

  24. tooluser says:

    Apply. Get discount. Charge merchandise. Pay off. Never charge again.


    Holiday Cat looks pissed off to me. Holiday Cat is too uptight. Holiday Cat should eat some cheese.

    • TasteyCat says:

      Not worth it. Each time you open up a new credit card account, the creditor makes a hard inquiry, and the new account then reduces your average age of accounts. A discount on a purchase, unless it’s a substantial purchase, isn’t worth the hit for an account that will go inactive and/or be closed in 6 months or a year.

  25. sopmodm14 says:

    if you were just about to shell out some greenbacks, i would just get the card to save the percentage, then deposit it in the bank, then take it out and pay it in full after the month…no muss, no fuss

    cash isn’t king anymore

  26. gman863 says:

    The only store cards worth having are those that offer long-term “same as cash” options. Buying $1200 worth of floor tile at Lowe’s is a lot nicer when you can pay it off at $100/month for 12 months without paying a dime in interest.

    Personally I think the 5% discount on the Target Red Card is a marketing ripoff; they’ve jacked prices throught the store that more than erase any “savings”. Case in point: A few months ago their store brand cat litter was $3.19 for a 20-pound bag. On Monday, it was now “Boots and Barklay” in a 25-pound bag at $4.69 (Kroger is still at $2.99 everyday for their better store brand). Even Holiday Kitty is smart enough to do the math on this one. If she visits Target, uncontrolled spraying and scent marketing is both approved and encouraged

    • pecan 3.14159265 says:

      I don’t get it – you prefer the Kroger store brand so you complain about Target’s store brand anyway? So you don’t like the change in price, quantity, or branding. The Boots and Barkley brand is a private label that is supposed to be a premium to the Up and Up store brand. It makes sense Target would charge more for it.

      • gman863 says:

        How exactly does one make clay cat litter “premium”?

        Cat steps into box. Cat takes a piss or dump. Cat makes lame attempt at burying the mess then steps out and moves on with life. Box gets stinky and must be changed every few days regardless of brand of litter used.

        I used to like Target when their prices were in line with competitors. Since their prices have gone “Up and Up”, they’re off my list of preferred places to shop.

  27. chocolate1234 says:

    I love my Limited card because it comes with free alterations. I always needs my work pants altered. Saves me money every time.

  28. ElizabethD says:

    My only store charge card is from Kohl’s, and it is SO worth it in discounts, “Kohl’s cash”, etc. But yes, as everyone else has noted: pay off that balance on time.