Store Credit Cards That Don't Suck

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Many consumers are loyal to a particular retailer. In order to increase that loyalty, many retailers partner with payment processors like MasterCard, Visa, American Express, and Discover to offer co-branded credit cards.

You can reap significant benefits with retailer branded credit cards, enjoying special discounts and perks at your favorite stores along with the traditional rewards that come with credit cards.

However, before you sign up for one of these, it’s important to note the difference between store branded cards and store credit cards.

  • Store branded cards feature the logo of a major payment processor as well as the store logo. These are Visa, MasterCard, Discover, or American Express cards that can be accepted anywhere the payment processor is used. These cards often have special rewards programs.
  • Store credit cards are those issued on behalf of the store, and are often issued by a bank owned by the store. These cards only work at the store. You might have access to some discounts and rewards, but the programs aren’t generous.

Retailer branded credit cards can be great choices for regular shopping, especially if you already shop a great deal with that merchant. Even so, unless you are a frequent shopper, you might still do better with other credit cards that aren’t co-branded.

Weigh the advantages and disadvantages before making your decision. Even though there are some good deals out there, rarely can a retail branded or department store card beat out a generous rewards program from a major issuer.

Top Choices for Retail Branded Credit Cards

If you are looking for some great choices for retail branded credit cards, consider some of these rewarding cards.

TrueEarnings Card® from Costco and American Express

One of the most popular warehouse stores in the United States is Costco. If you have a Costco membership, you can sign up for the TrueEarnings® Card.

TrueEarnings offers 3% cash back at US gas stations up to $4,000 per year in purchases. You also get 2% cash back on eligible travel purchases and at US restaurants. Other purchases, including Costco purchases, receive 1% cash back. Cash back is received annually in the form of a reward coupon. There is no annual fee for Costco members.

  • Earn cash back: 3% US gas stations up to $4,000 per year in purchases; 2% US restaurants & eligible travel; 1% other purchases. See details.
  • You will receive your cash back annually in the form of a reward coupon
  • The Two-In-One Card: it's an American Express® Card and Costco membership Card, with no annual fee for Costco members
  • Maximize your cash back: Add additional Card Members to help get more cash back for you, also with no annual fee for Costco members
  • Terms and restrictions apply

Sign up for the TrueEarnings® Card from Costco and American Express today! Rewards Visa Card

If you are an avid shopper on, this Visa card might be for you. You get three rewards points for each dollar you spend on, plus two points for each dollar spent at gas stations, restaurants, drugstores, and office supply stores. Every other purchase is one point per dollar.

Shop with Points allows you to pay for purchases with your rewards, and you also have the option to redeem for cash back, gift cards, and travel. This Visa card is issued through Chase and is ideal for consumers who shop Amazon frequently. There is no annual fee.

Walmart Discover Card

The Walmart Discover card is accepted everywhere that Discover is. This card includes a number of offers for the holiday season. There is no interest on purchases of electronics totaling more than $429, as long as you use the printable certificate. Additionally, you can save 15 cents per gallon on gas at Walmart gas stations until December 24, 2012.

The Walmart Discover offers 1% cash back on all purchases that you make, and you can also get a free monthly FICO Score with online statements. It is also possible to get a cash advance when you make purchases at Walmart. However, rather than showing up as a cash advance, these advances are billed at the lower purchase APR. There is no annual fee.

Should You Use a Department Store Credit Card?

It can be tempting to sign up for a department store credit card. Many store cards offer bonuses, usually between 10% and 20% off your purchase, when you apply. This one-time perk is often used to draw you in—especially since stores will offer the discount even if you are rejected.

Unfortunately, department store credit cards have a few disadvantages:

  • Store credit cards can’t be used at other retailers.
  • Interest rates are often higher than major credit cards and retailer branded major credit cards.
  • Credit limits are usually lower than major credit cards.
  • Redemption might not be in cash back, but in store credit.
  • These cards don’t have the same positive affect on your credit score as a card from a major bank card.

If you decide to get a department store credit card, consider how often you shop at the store. The only way you can even begin to justify getting one of these cards is if you are a frequent shopper. It’s also a good idea to avoid carrying a balance, since the cost of doing so can easily offset any perk you received for signing up.

Kohl’s Charge Card

Click here to apply nowA great option for department store credit cards is the Kohl’s Charge Card. It’s called a “Kohl’s Charge,” but it’s actually a credit card with a rather high 21.9% APR. You receive in store rewards of between 15% and 20%. Additionally, you get “personal sales days” 12 times a year and other special discounts. Since I shop Kohl’s frequently, this would be my choice if I ever decide to get a department store credit card.

Target REDcard

Click here to apply nowAnother popular choice is the REDcard from Target, which offers 5% off all your purchases at Target. You also receive free shipping when you buy from Target’s web site. You can also get a debit card version of the REDcard, which works like a check, and draws on your checking account. There is no annual fee for either card.

Sign up for the Target REDcard today!

Saks Fifth Avenue MasterCard

If you want to earn rewards beyond the department store attached to the card, the Saks Fifth Avenue MasterCard can work for the more upscale consumer. This card offers rewards spending at spas and salons. There is no annual fee for this card.

Even for frequent shoppers, getting a department store card may seem like a good idea at the time, but the disadvantages over the long haul—especially if you carry a balance—generally outweigh the short-term benefit. You can usually do better if you get a good cash back credit card with a solid signing bonus.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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Lisa B

I have a Victoria's Secret store card. I don't do a lot of business there, but I shop Bath and Body Works, especially for the semi-annual sale. You can use the VS card at BBW store! I always pay it off, and it works out fine. At this time, you can't use the VS card on-line at BBW. I hope they change that soon. Between the free panties and BBW free travel size items coupons I receive in the mail, I receive a $10 VS gift card on my birthday and some other times. It is a card worth having, just pay it off, because the interest is over 20%.

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Lisa B

I use my Amazon card mainly for Amazon purchases, but also have my college attending daughter on the card, in case she needs something I would normally pay for when I am not around. This is also a high-interest card, so thankfully I am now able to pay it in full at month's end. Couple this with Amazon Prime (discounted for college students) and you can save a good deal of money!
My mother also carries the Old Navy Visa with myself and my children on the card (20 and 25). She treats my daughter to some clothes a couple of times a year, but the most we use it is to pick up fast food every Sunday. Me being on the card me to pick up and take food to her and my father, allowing her to pay but not leave the house. My son doesn't need the card, but she insists on him having it in an emergency, and being a Visa it has helped us all at one time or another.
My point is that you receive Old Navy bucks by using this card. I don't know what the earning levels are, but we (my Mom, but as she is 75, she passes these to my daughter) receive probably $100 bucks a year to use at Old Navy or The Gap! Comes in very handy!