There aren’t any retailers that offer store charge cards. Many people refer to store cards as charge cards. It’s common to hear reference to a Walmart charge card, a Kohl's charge card or a Target charge card as a result. But store cards are credit cards on which you can carry a balance from month to month, not charge cards whose balance must be paid in full each month. A good rule of thumb to remember is that if it has an interest rate, it's not a charge card.
Store credit cards aren’t charge cards, but they should be used like charge cards. The reason is that a lot of stores with special financing deals aren’t being as friendly as they might seem. It’s usually low interest with a catch – the catch being a whole lot of interest if you don’t pay on schedule. That’s irrelevant if you only use store credit cards for purchases that you can pay off by each due date, though, and store cards are really generous rewards-wise.
Besides, you can get most store cards with fair credit. Charge cards are usually for very good-to-excellent credit.
What actually gets a bit confusing is that there are two types of store credit cards: store-only cards and store-affiliated cards that can be used anywhere. Still, neither is a charge card technically.
Store credit cards work like regular consumer credit cards, in that you make purchases on the card, and you make payments on your purchases, either in full, or over time. The difference is, with a store credit card, you’re typically limited to purchases within the store, a group of stores or the store websites.… read full answer
The exception is a store card co-branded with a network such as Visa or Mastercard. You’ll still be eligible for any in-store discounts when you use the card, plus you’ll have the flexibility of using the card anywhere the card’s network is accepted.
Store credit cards come with advantages, and some pitfalls. You’ll have to assess how frequent you shop at the store, along with your spending habits and current credit profile before you apply.
Here are some store credit card advantages:
Easy approval: Store cards typically require at least fair credit, making it easy to qualify. Co-branded store credit cards might be harder to get because of their added spending power. Expect most co-branded store cards to require at least good credit.
Builds and establishes credit: A store credit card is just that, a credit card. Any activity on the card should be reported to the major credit bureaus. Just be careful not to overspend at your favorite store, or you may end up damaging the very credit you’re trying to establish.
Rewards and benefits: You can receive generous discounts on in-store purchases just by applying in the check-out line. You’ll also receive offers for other perks and benefits such as free shipping, no-hassle returns and exchanges, online discounts, and more, all when you use your card. Co-branded store cards get to cash in all the store perks, and may also earn rewards on purchases made outside of the store.
Here are some store credit card disadvantages:
The debt trap: Your favorite store credit card is not an invitation to overspend. Be careful with “exclusive” sales events. Your intent might be to save a few bucks on sale items, but oftentimes, the tendency is to spend more, thinking the savings will offset the cost of the additional purchases. The reality is you’ll likely end up with more debt than you’d originally planned.
Low credit limits: Don’t expect to have much spending power with a store credit card, especially if this is your first credit account. With a couple of quick purchases, you’ll easily end up burning up most of your available credit. That will push your credit utilization, or debt-to-credit ratio, to an unfavorable level. Try to maintain a ratio of less than 30%. The higher your utilization, the less likely you’ll be eligible for credit limit increases or additional credit accounts.
High interest rates: Store credit cards often charge significantly higher interest rates than regular credit cards. The average regular APR for store credit cards was 28% in 2020. If you carry a balance or are overextended on your store credit card, the debt will mount quickly. Interest is calculated daily and starts accruing on the transaction. That interest is compounded, which means if you carry a balance, another wave of interest charges will pile on top of the interest accrued during the previous month.
Beware of any 0% financing promotions a store may offer when you make a large purchase on your store credit card. Hidden in that offer can be something known as deferred interest, and it’s standard practice on most store credit cards. You charge a specific amount on your store credit card, and you’ll receive 0% interest if you pay off the balance in full in a specified number of months.
The problem is, you’re not really getting 0% interest in the traditional sense. That interest is “deferred,” meaning the only way you’ll get the 0% rate is if you pay the balance in full before the end of the promotion. Otherwise, any balance left after the promotion expires, could activate the regular interest charges for the entire purchase amount. So if you’re in the market for a credit card with good financing options, it’s better to steer clear of store credit cards with deferred interest and opt for a credit card with a true 0% introductory APR offer.
The best store credit cards that can be used anywhere include the Amazon.com Credit Card, which earns 3 points per $1 spent at Amazon.com and Whole Foods Market, 2 points per $1 spent at gas stations, restaurants and drug stores, 1 point per $1 spent on all other purchases. And … read full answerCostco Anywhere Visa® Card by Citi gets you 4% cash back on eligible gas for the first $7,000 per year, 3% on restaurants and travel, 2% on Costco and Costco.com purchases, 1% on all other purchases.
Store credit cards that can be used anywhere are known as co-branded, or open-loop cards. In addition to their traditional store cards, which can only be used for store-related purchases, retailers will sometimes offer a store card linked to a credit card network such as Mastercard or Visa. Co-branded credit cards are issued by banks that include Comenity, Synchrony, Citi, and Chase.
Co-branded store credit cards tend to have stricter requirements for approval than their store credit counterparts. You'll typically need good credit or better to qualify. These cards can also earn significant benefits when used outside of the store. At the same time, they still enjoy all the perks and discounts that come with in-store and online purchases.
Here are the best store credit cards that can be used anywhere:
Best for online purchases:Amazon.com Credit Card. $50 Amazon.com gift card upon approval ($150 for Prime members). 3 points per $1 spent at Amazon.com and Whole Foods Market, 2 points per $1 spent at gas stations, restaurants and drug stores, 1 point per $1 spent on all other purchases. $0 annual fee. Requires a credit score of 700, at a minimum. That means you need good credit or better for approval.
Best for wholesale club purchases:Costco Credit Card. Earn 4% cash back on eligible gas for the first $7,000 per year, 3% on restaurants and travel, 2% on Costco and Costco.com purchases, 1% on all other purchases. $0 annual fee with a paid Costco membership. Requires a credit score of 750, at a minimum. That means you need excellent credit for approval.
Best for grocery shopping and everyday purchases: Capital One Walmart Rewards® Mastercard® Earn 5% cash back in Walmart stores using Walmart Pay for the first 12 months, 5% back on Walmart.com purchases, 2% back at Walmart stores and fuel stations, 2% back on restaurant and travel purchases, 1% back on all other purchases. $0 annual fee. Requires a credit score of 640, at a minimum. That means you need fair credit or better for approval.
Best for gas purchases:Sam's Club® Credit Card. $30 statement credit for making a purchase of $30 in the first 30 days. Earn 5% cash back on gas (up to $6,000 spent per year), 3% back on dining, takeout and on Sam’s Club purchases for Plus members, and 1% back on all other purchases (up to $5,000 earned in cash back rewards per year). $0 annual fee. Requires a credit score of 700, at a minimum. That means you need good credit or better for approval.
Best for high-end shopping:Nordstrom Credit Card. Receive a $60 Note when you make any purchase with Nordstrom. Earn 1 - 3 points / $1. $0 annual fee. . Requires a credit score of 700, at a minimum. That means you need good credit or better for approval.
Best for electronics purchases:Best Buy® Credit Card. 2.5 points per $1 spent on Best Buy purchases, 1.5 points per $1 spent at gas stations, 1 point per $1 spent at restaurants, bars and grocery stores, 0.5 points per $1 spent on all other purchases. $0 annual fee. Requires a credit score of 700, at a minimum. That means you need good credit or better for approval.
Store credit cards that can be used anywhere offer more flexibility than traditional store credit cards, but unless you want supplemented rewards at a specific store, you may still find better and more value with a general rewards card.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.