2018 Sears Credit Card Review – WalletHub Editors
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The Verdict: Sears, a nationwide retailer perhaps best known for its appliances and a shrinking store count, appears to have already thrown in the towel as far as its eponymous credit cards are concerned. Neither the Sears Mastercard Credit Card nor the Sears Store Credit Card charges an annual fee, but that’s pretty much the best thing going for both.
The Sears Mastercard — presumably the better of the two offers, considering you need “good” credit for approval versus just “fair/limited” credit for the store-only version — gives you a choice: $15 off your purchase on the same day your account is approved or six-month promotional financing that includes a dangerous feature called “deferred interest.” Beyond that, all you’ll receive is access to periodic specials, whether discounts or financing, for certain purchase categories and a regular APR that’s nearly 8% higher than the average for “good-credit” credit cards.
The only thing that’s different about the Sears Store Card, other than its use being limited to the Sears family of brands, including Kmart, is a $10 initial discount, instead of $15, if you eschew promotional financing.
As a result, neither Sears credit card amounts to much more than another offer in a long line of available no-annual-fee credit cards. Neither approaches even the average rewards or financing terms you can expect to qualify for, whether you have good or limited credit. We therefore recommend leaving both on the shelf, so to speak. Read on to learn more.
- $10-$15 Credit: If you get approved for the Sears Mastercard and make a purchase that day, you will automatically receive a $15 statement credit. If you get the store card, it’ll be $10. Such savings certainly won’t make you rich, but they’re better than nothing. You also have to turn down promotional financing on that first purchase in order to qualify, but even these modest savings are preferable to the dangers of deferred interest (see “The Lowlights” section below).
- No Annual Fee: Although the Sears credit cards don’t give you much, they at least don’t necessarily take anything from you, either. Their lack of annual fees helps cushion your budget and enables cost-effective credit building.
Deferred Interest 0% Financing: All of the many promotional financing arrangements offered via the Sears credit cards have a nasty little secret known as “deferred interest.” Its presence means that if you’re late on a monthly payment by even a day or you’re just a dollar short of paying off your full balance by the end of the promotional period, the card’s regular interest rate will retroactively apply to your entire original balance. Such an offer therefore has the potential to leave you saddled with a surprisingly expensive bill, a risk not worth taking when so many consumer-friendly 0% APR cards are available.
That’s especially true when you consider that opting for one of Sears’ promotional financing offers — including those that waive interest for more than six months, which are available during the first month after account opening — precludes you from receiving the $10 to $15 initial bonus and 5% special discounts in select categories.
- High Regular APR: Both the Sears Mastercard and the Sears Store Card have a 27.24% (V) regular APR. Compare that to 19.88% for the average good-credit credit card, according to WalletHub’s latest Credit Card Landscape Report, 22.41% for its fair-credit counterpart and 25.48% for the average store card, and you’ll understand why it’s a bad deal.
- No Ongoing Rewards: If you turn down the Sears cards’ promotional financing offers, you’ll benefit from access to regular deals, such as the point equivalent of 5% cash back on electronics purchases of $599 or more. However, there is no standard ongoing, spending-based rewards program. In other words, you won’t earn a certain number of points or a certain percentage in cash back for every purchase that you make with your card. That’s clearly a bummer for loyal patrons of Sears.
Other Things To Consider
- Store Card Offers Surprising Flexibility: Most store credit cards can only be used at the retailers whose names they bear. That doesn’t quite describe the Sears Store Card, however, as it can also be used at Kmart, which is owned by the Sears Holding Company.
- Temporary Shopping Pass: If you find yourself at Sears or Kmart needing to make a purchase but unable to find your card, you can obtain a temporary card to use by showing your ID to a store employee. It’s a nice convenience.
- 5% Balance-Transfer Fee: You probably wouldn’t even think to transfer a balance to the Sears Mastercard (not allowed with the store card), considering the treacherous financing climate it fosters. But if by chance you do, its 5% balance-transfer fee should help dispel that notion once and for all. The market average, in case you’re wondering, is 2.55%.
- 3% Foreign Transaction Fee: Sears doesn’t have an international presence, so this particular nuisance fee applies only to the Mastercard. In short, it’s good reason to leave your Sears Mastercard at home in favor of plastic that will reward you for what you spend abroad, not charge you for it.
Compared To The Competition
Sears isn’t the only store where you can shop, and its credit cards aren’t the only plastic you can pay with. It’s well worth browsing around in both cases, so we’ll help you out by explaining how the Sears Mastercard — the better of the two — stacks up against its top competition.
Sears Credit Card
Walmart® Credit Card
Amazon.com Credit Card
Target Credit Card
|Rewards Bonus||$40||$35 discount||$50||N/A|
|Rewards Rate||10 - 50 points / $1||1 - 3% Cash Back||1 - 3 points / $1||5% Cash Back|
|Purchase Intro APR||0% for 6 - 18 months||Not Offered||Not Offered||Not Offered|
|Transfer Intro APR||Not Offered||Not Offered||Not Offered||Not Offered|
|Regular APR||27.24% (V)||18.9% - 24.9% (V)||16.24% - 24.24% (V)||24.65% (V)|
|Editors’ Rating||1.6 / 5||2.5 / 5||4.5 / 5||5.0 / 5|
|Details, Rates & Fees||Learn More||Learn More||Learn More||Learn More|
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