Store Credit Cards: 5 Important Details to Know

As the holiday season approaches, store credit cards get all the more popular with shoppers. Store credit cards can provide an additional line of credit for those who have big holiday shopping lists from particular shops.

Whether it is a card from their go-to store, or just from a place where they are making a large purchase, many people choose to open store-specific credit cards. Although these cards often offer exclusive perks to cardholders, they often also come with their fair share of drawbacks. 


In this article, you’ll learn both the good side and the not-so-good side about store credit cards so that you know exactly what to expect from them. If you are thinking about opening one of these accounts, continue reading below.

Store Credit Cards
There is an absolutely mind-boggling array of Store Credit Card choices out there! Image source:

1. Store Credit Cards Are Exclusive to Issuing Stores

Store credit cards are often exclusive to the issuing stores, meaning that they work only when you use them at the store that issued them; they may not work elsewhere.

At the same time, when you use your card at the issuing store’s outlets, you are quite likely to get the best deals on your purchases. This includes exclusive discounts, offered upfront when you confirm you are paying with the store card in question.


There are exceptions to this exclusivity rule. For example, if your card is a Visa or MasterCard, it may be accepted at all places where such cards are accepted. Nonetheless, it’s important to consider that the exception factor could limit your use of a store credit card.

2. Relatively Easy to Obtain

A big advantage of store credit cards is the fact that they are relatively easy to obtain. For instance, stores take a far more lenient stance on credit scores when issuing these cards. Therefore, even if you have a rather poor credit score, your chances of being granted a store credit card are reasonably high.

An upside to this is the fact that you can use store credit cards to build credit. You can improve your credit score by paying your credit card bills on time and ideally in full, at the end of each billing cycle. As you continue doing so, your chances of being granted a “regular” credit card increase incrementally.


3. Low Credit Limit

A downside to the fact that these cards are issued easily is that they typically come with low credit limits. In many cases, those limits may just be enough for a single outing of reasonable shopping at the requisite store.

But again, you need to look at the fact that these cards are issued with minimal fuss, even to those with relatively poor credit scores. Stores need to minimize their risk, which they do by keeping credit limits low.

As you shop and pay off your credit card bills in a disciplined manner, there is a chance that your credit limit will be increased.

4. High APR

While this may not apply to every store card, many of these credit cards do come with a very high Annual Percentage Rate (APR) compared to the average credit card. You do need to take this into consideration before splurging on the store card given to you.

This is especially important if you are unsure of being able to repay back the full amount when it is due. If you max out the credit limit available on your store card and are then unable to repay in full, you will owe a lot in interest charges.

5. Possibility of No-Interest Financing Terms

Some stores offer special financing terms on the credit cards they issue, which include the possibility of no interest being charged for a specified duration.

For example, for the first six months of which you hold the card and make purchases of qualifying amounts, you may not be charged any interest, even if you do not pay the entire outstanding amount each billing cycle. As long as minimum amounts are being paid, you could possibly not be charged any interest at all.

It’s important to note that stores can and do offer special financing terms on the credit cards they issue. However, this is not guaranteed with every store card, so you must check with the issuing store for any special financing terms.

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Clearly, store credit cards have their pros and cons. You need to evaluate your benefits based on your own unique situation and decide if it is a better option than a traditional credit card. If you open one of these card accounts, it is important that you know how to use it to your best advantage.