A store card has limited use compared to a regular credit card. Store cards can only be used for purchases from a specific store or group of stores. Regular credit cards can be used at any merchant that accepts cards from their network – American Express, Discover, Mastercard or Visa. Many stores also offer cards that are co-branded with a major credit card network. These cards work the same way as a regular credit card but have some store-specific benefits.
Regular credit cards and co-branded cards tend to have stricter requirements for approval than store credit cards. Most store cards require only fair credit (640-649 credit score) to be approved, whereas co-branded cards generally require good credit (700-749). Other non-store credit cards are available to people with all kinds of credit, from bad to excellent.
Those are the most obvious differences between a store card and a credit card. But there are others. For example, store cards have higher regular APRs than general-purpose credit cards, on average. If you carry a balance, the store card’s higher APR may cancel out any discounts or rewards earned on store purchases.
In addition, store cards with “0% intro APRs” typically use deferred interest. This means if you don’t pay the entire balance before the introductory period ends, you’ll be charged interest all the way back to the original purchase balance. Regular credit cards with 0% APRs only charge interest on any unpaid balance remaining after the promotion ends.
Ultimately, the differences between store cards and credit cards favor credit cards, and for good reason. Store cards can help people with fair credit improve their score, while helping anyone eligible for approval save money on purchases at popular stores. But their use is limited. Traditional credit cards are better if you plan to use the card for everyday spending. You’ll reap a lot more value because you can use the card at far more places. The same is true for co-branded cards affiliated with a particular store, though their rewards for purchases unrelated to that store usually are not as good.