Do You Know Store Credit Card Basics?

If you want to open an account to buy holiday gifts or just make everyday purchases, you might consider going with a store credit card. Unlike a traditional credit card not affiliated with a retailer, a store card offers special benefits for purchases through a specific retailer. These cards sometimes are limited to use for store-only purchases, while others come with more flexible terms and offer benefits regardless of where you shop. Take a look at some answers to common store credit card questions to learn more about using these cards.

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A store credit card will bear the brand of the retailer offering it, but it will be issued through a financial institution that works with the retailer. This could mean that the card only works online or in person at that specific store, while other store cards feature the logo of a major network like MasterCard or Visa and will work anywhere those are accepted.

These cards tend to offer special perks like zero-interest financing plans, discounts, shopping events or points to encourage their use at the affiliated store. If the card works anywhere, certain benefits may extend to purchases made through other vendors but may be limited. Therefore, it's important to opt for a store card with the flexibility and benefits you need.

Approval requirements vary by card but include typical factors like your household income, credit score and credit history.

Common perks like money off the first purchase, year-round discounts, reward points and special sales events can make a store card appealing. If your card is offered through a major payment network like Visa, you also get the flexibility to use the card through other vendors too. Since a store credit card may have easier approval requirements, another upside is it can be a good choice for building your credit.

A major downside is your store credit card might only work at that one retailer and not other vendors that have what you need or offer better pricing. It's also common to have a higher interest rate and lower credit limit, which can make the card terms less appealing. Another downside is the risk of the potential rewards encouraging you to spend more and go into debt.

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You can get a store credit card for various general and specialty retailers such as:

• Kohl's
• Walmart
• Amazon
• Target
• Best Buy
• Kroger
  
• Macy's
  
• Sears
• Macy's
• TJ Maxx
• JCPenney
• Guitar Center
• Home Depot
  

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Retailers offering these cards usually make it convenient to apply and may even let you have a temporary card for immediate use. It's often as easy as applying online through the store's website, but you might even complete the process at the store checkout lane when you make your purchase.

Approval requirements vary by card but include typical factors like your household income, credit score and credit history. Like with any credit card application, you'll provide identifying information, disclose your income and share employer details. Even if you receive a temporary paper card, you'll get the official card in the mail a week or so later.

Before applying for any store credit card, consider whether you'll shop enough through the retailer to reap the benefits, especially if the card's not valid elsewhere. Keep in mind that opening too many store credit card accounts can harm your credit score and might encourage you to spend more than you should. You'll want to keep your budget in mind when using these cards, avoid late payments and pay attention to when any special financing offers end so you don't end up with unwanted interest.

For the best results with store credit cards, consider making a full payment each month so you can reap the benefits and avoid the interest charges and other downsides that come with debt. Also, watch out for special promotions the retailer might offer, especially during the holiday season, so that you don't miss out on potential member rewards.

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