Store Credit Cards

Only one store credit card for bad credit is currently available. It’s called the Fingerhut Credit Account. Fingerhut is an online retailer that sells everything from clothing to electronics. And in addition to being available to people with bad credit, the Fingerhut Store Card does not charge an annual fee. So even if you don’t plan to buy anything from Fingerhut, this store credit card for bad credit can help you improve your credit standing at a low cost.

You can monitor your credit-building progress for free on WalletHub, the only site with free daily credit scores and reports. This way, you’ll know when your bad credit improves to fair territory, at which time you should be able to get pretty much any store credit card.

There are many different types of store credit cards, just like there are many different types of stores. This includes discount-store credit cards, online store credit cards and much more. But since department stores are among the most popular retailers around, their plastic tends to be in high demand.

To identify the best offers on the market, WalletHub compared 20+ leading department store credit cards based on their rewards, interest rates and popularity. Fees and approval requirements don’t provide any basis for comparison because none of the cards we considered charge an annual fee and all require at least fair credit for approval.

Based on this analysis, here are the best department store cards on the market right now:
 

2018’s Best Department Store Credit Cards

• Best Initial Bonus – Kohl’s Credit Card
• Best Ongoing Rewards – TJX Store Card
• Most Popular – JCPenney Credit Card
• Lowest APR – Nordstrom Store Card

In case you’re wondering, all of these offers can be considered instant approval department store credit cards. Most applicants who apply at a store location will receive a decision right away.

Store credit cards can only be used at the retailers they’re affiliated with. But they tend to offer plenty of perks to make up for this limitation. Many store credit cards offer significant discounts on the first purchase you make on the day of account opening as well as ongoing rewards that can save loyal customers a lot of money.

Store cards also have lower credit requirements than their terms would ordinarily merit, and most do not charge annual fees. That means they can help people with "fair" to "excellent" credit improve their credit scores inexpensively. The one thing you don’t want to do with a store credit card is carry a balance from month to month. Most have very high APRs, and those that offer 0% financing use a dangerous feature called deferred interest.

Without a doubt, the biggest thing to watch out for when shopping for a store credit card is a feature called deferred interest, which is used by nearly half of the major retailers that offer financing. A deferred-interest store card will usually try to hook you with a 0% intro rate while hiding the fact that such rate is far from guaranteed. If you pay your bill a day late or leave a $1 balance unpaid at the end of the 0% promotional period, the credit card company will go back and assess interest to your entire original purchase amount like the 0% deal never existed. In other words, you could wake up to a big bill instead of savings if you err in the slightest. So stick with general-consumer 0% credit cards for big-ticket purchases because they don’t use deferred interest.

It’s doubly important that you avoid store-card financing considering that many offers make you choose between rewards and a promotional interest rate. Rewards are what you really want from a store credit card. With that in mind, you should also make sure to check how much a card’s points or miles are worth, if it doesn’t offer cash back. For example, you might discover that 5 points from one card are worth more than 10 points from another.

Finally, it’s a good idea to confirm that your credit standing qualifies you for approval. Store credit cards tends to have fairly lenient approval requirements, compared to general-consumer cards with similar terms, but you’ll have a hard time getting one if you have bad credit. In that case, we recommend getting a secured credit card with no annual fee, using it responsibly and graduating to a store credit card when you improve to at least fair credit. You can track your progress for free on WalletHub, thanks to daily credit score updates and personalized credit-improvement advice.

The answer is pretty simple, actually. Some store credit cards have a card network logo (e.g. from Visa or Mastercard), which means they can be used wherever that card network is accepted. Others don’t, so they can be used only at the “store” they represent. Many retailers actually offer both types of store credit cards, but you won’t always get to choose which one you get. That’s often decided for you based on your credit standing. The better your credit is, the more likely an issuer is to trust you with the power to spend at other stores. There’s less to lose with store-only cards because the store already benefits from every purchase that you make.

Getting the store-only version isn’t necessarily a bad thing, though. Both types of store credit cards tend to provide their highest rewards-earning rates on purchases made with the retailers they represent. So that’s often all you should use them for, anyway.

Retail credit card is just another name for a store credit card. And that, as you may know, is simply a card that can only be used to make purchases from a single retailer.

Retail credit cards tend to be available to people with fair credit or better and usually don’t charge annual fees. They are known for offering generous rewards, especially compared to non-retailer cards with similar approval requirements. These rewards come in the form of first-purchase discounts, “cash” back on purchases (redeemable for store credit), and special cardholder promotions.

Retail cards are notoriously bad for financing, though. Those with 0% rates typically use a dangerous feature called deferred interest, and the average regular APR is a lofty 22%, according to WalletHub research.

In-store credit can mean a few different things. But it typically refers to the type of refund you may get when an item is no longer eligible to be returned for cash. In other words, you can’t get your money back entirely, but you can exchange the item for something of equal value from the same store.

Similarly, in-store credit can also refer to rewards offered by a store credit card. For example, the points or “cash” back that many store cards offer is generally redeemable for store credit.

Finally, in-store credit could refer to store credit cards themselves. You can apply for most retailers’ credit cards in one of their store locations. In fact, some cards require it.