Don’t Sign Up for a Store Credit Card Unless It’s One of These

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

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I always brace myself for that moment at the cash register when the cashier asks me if I want to apply for a store credit card.

“You can get a discount on today’s purchase,” they always say. And who doesn’t love discounts?

Not all store credit cards are worth having, though, even with a discount. Find out how you can tell the difference between a store credit card that’s a gem and one that’s a drain on your wallet.

Why it’s best to avoid most store credit cards

Store credit cards are popular because they’re easy to get and offer extra perks to loyal shoppers. But unless you know what you’re getting into, they often aren’t worth the trouble. Here’s why.

Restrictive acceptance

Most store credit cards are closed-loops cards, meaning you can use them at only one store. Depending on how many stores you shop at regularly, you could have several cards to manage.

Low credit limits

If you’re working to rebuild your credit or just starting to build it, store credit cards are low-hanging fruit. However, they often come with low credit limits, sometimes starting you out at $200 or $300.

Just remember: A big part of your credit score is how much of your available credit you use. So, if you have a low credit limit, you have to use the card sparingly to keep a high credit utilization from hurting your credit score.

Rewards often aren’t worth it

The upfront discount most retailers offer as a carrot is usually a small fraction of what you could get with a decent cash-back credit card.

You might get bonus rewards and special promotions with your card. However, they’re good at that store only, limiting your redemption options.

High interest rates

The average credit card APR is 12.77%, according to May 2017 Federal Reserve data.

In other words, if you have a store credit card, make sure you pay off your balance in full every month. Otherwise, you’re looking at paying a lot more in interest.

4 best store credit cards

Not all store credit cards are bad. Some can be just as rewarding as these cash-back credit cards on the market.

Here’s a quick summary of the best store credit cards. Read on to learn more about their pros and cons.

Amazon Rewards Visa® Signature Card Best for Amazon shopping
Costco Anywhere Visa® Card by Citi Best for gas and groceries
Target REDcard™ Credit Card Best for everyday shopping
Gap Inc. Visa Card Best for clothes shopping

Amazon Rewards Visa® Signature Card

Amazon is the largest online retailer in the U.S., and you can get just about anything on its website. If you prefer to shop from the comfort of your couch, the Amazon Rewards Visa® Signature Card is a must-have.

Benefits

Standout rewards

If you’re not an Amazon Prime member, you’ll the following rewards:

  • Earn 3% back at Amazon.com and Whole Foods Market, 2% back at restaurants, gas stations, and drugstores, and 1% back on all other purchases.
  • Get a $50 Amazon.com Gift Card instantly upon credit card approval.

As you can tell from the bonus rewards categories, this is an open-loop card, so you can use it anywhere.

No foreign transaction fees

This perk is impressive because it’s usually reserved for travel credit cards.

The typical credit card foreign transaction fee is 3 percent, so if you head overseas, bring this card with you.

Travel protections

Here’s another reason to take this card with you when you travel: You’ll get baggage delay insurance, lost luggage reimbursement, and travel accident insurance.

Drawbacks

Wide APR range

The Amazon Rewards Visa® Signature Card’s APR ranges from 15.99% to 23.99% Variable, depending on your creditworthiness.

Maximizing rewards will cost you

The annual fee is $0.

Of course, Amazon Prime comes with several benefits that make its annual fee worthwhile for loyal shoppers.

The information related to Amazon Rewards Visa® Signature Card has been collected by Student Loan Hero and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.

Costco Anywhere Visa® Card by Citi

The Costco Anywhere Visa® Card by Citi isn’t just one of the best store credit cards — it’s one of the best cash-back credit cards, period.

Benefits

Rewards are hard to beat

The card offers an impressive set of bonus rewards for major spending categories. You’ll earn the following:

  • 4% cash back on eligible gas for the first $7,000 per year and then 1% thereafter, 3% on restaurants & travel, 2% at Costco & Costco.com, 1% on all other purchases

And it’s a Visa card, so you can use it anywhere Visa is accepted.

Travel protections

You’ll get special perks if you use your Costco Anywhere Visa® Card by Citi when you travel, including trip cancellation and interruption protection, travel accident insurance, and travel and emergency assistance.

Drawbacks

You need a Costco membership

The card itself doesn’t charge an annual fee, but you have to be a Costco member to use it.

What’s more, your card can be closed if you let your Costco membership lapse, causing you to forfeit any cash back you’ve earned and haven’t redeemed.

Your redemption options are limited

With the Costco Anywhere Visa® Card by Citi, you can redeem your cash back only once a year. Costco sends it in check form via U.S. mail with your February billing statement. You can cash the check or use it on a purchase at your local Costco store.

The information related to Costco Anywhere Visa® Card by Citi has been collected by Student Loan Hero and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.

Target REDcard™ Credit Card

If you’re not big on online shopping, your local Target likely has most of the things you need for your everyday purchases. If not, the Target REDcard™ Credit Card also works on Target’s website.

Benefits

Solid, no-fuss rewards

You don’t have to memorize bonus rewards categories with the REDcard.

Instead, you’ll earn 5% at Target & Target.com

$0 annual fee

The Chase Freedom Unlimited® has a $0 annual fee

Other sweet perks

Loyal Target shoppers will also benefit from free shipping on most items purchased online and an extra 30 days to return damaged or unwanted items.

Drawbacks

Closed-loop card

If you do most of your shopping at Target, it might not be an issue. But if you shop there only occasionally, it might not be worth keeping track of another credit card.

High APR

You’ll pay a 25.15% Variable APR on this card if you carry a balance. That’s on par with the average APR for store credit cards, but it’s much higher than the average for other credit cards.

The information related to Chase Freedom Unlimited® has been collected by Student Loan Hero and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.

Gap Inc. Visa Card

If you tend to shop for clothes at Gap and its other brands (Old Navy, Banana Republic, Athleta) then the Gap Inc. Visa Card is worth considering. It’s an open-loop card too, so you can use it anywhere.

Note that this card is different from the Gap Inc. Credit Card, which is a closed-loop card you can use only at Gap brands.

Benefits

Rewards and discounts

You’ll earn five points per dollar spent at Gap and any of its other brands. You’ll also earn one point per dollar spent elsewhere.

When you sign up for the card, you’ll get a 20 percent discount and free shipping on your first order. You’ll also get 10 percent off every time you shop at Gap and Gap Factory stores as well as access to special discount events.

Other benefits

Every year, you’ll get a special birthday gift — in addition to paying no annual fee. You also don’t need to worry about keeping track of your receipts for returns because Gap tracks your orders with the card.

Lastly, you’ll get Gap Silver status if you earn at least 5,000 points in a calendar year. Perks that come with silver status include:

  • Access to special events
  • Free basic alterations on Banana Republic purchases
  • Free shipping on online orders
  • Priority customer service
  • A coupon good for anytime

Drawbacks

High APR

This card’s APR is high, even for a store credit card. The ongoing APR is 25.74% Variable, so be sure to avoid carrying a balance from month to month.

Limited value beyond Gap

If you don’t shop for clothes often or you shop deals everywhere, this card won’t provide much value. It’s an open-loop card that offers one point per dollar on non-Gap brand purchases, but there are several cash-back credit cards that offer more than that.

The information related to The Gap Inc. Visa Card has been collected by Student Loan Hero and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply. Information is accurate as of the date of publishing.

Make your shopping at lot more rewarding

When you’re confronted with the chance to sign up for a store credit card to get a discount, the best response in most cases is to refrain.

If you shop somewhere regularly, though, it might be worth considering that store’s credit card. If not, opt for a card that allows you to make purchases elsewhere and gives you more options to earn rewards. Let ongoing benefits drive your decision instead of sign-up discounts and bonuses.

If you choose the right card, your everyday shopping will become a lot more rewarding.

Interested in refinancing student loans?

Here are the top 7 lenders of 2019!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.45% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.81% APR (with Auto Pay) to 6.49% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of November 6, 2019, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 11/06/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at hello@earnest.com, or call 888-601-2801 for more information on our student loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.


2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.46% APR (with AutoPay) to 7.61% APR (without AutoPay). Variable rates currently from 2.31% APR (with AutoPay) to 7.61% (without AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.31% APR assumes current 1 month LIBOR rate of 2.31% plus 0.75% margin minus 0.25% for AutoPay. If approved for a loan, the fixed or variable interest rate offered will depend on your credit history and the term of the loan and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

3 Important Disclosures for Laurel Road.

Laurel Road Disclosures

Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

ANNUAL PERCENTAGE RATE (“APR”)
This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

FEE INFORMATION

There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.

LOAN AMOUNT

For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
For eligible Associates degrees in the healthcare field (see Eligibility & Eligible Loans section below), Lender will refinance up to $50,000 in loans for non-ParentPlus refinance loans. Note, parents who are refinancing loans taken out on behalf of a child who has obtained an associates degrees in an eligible healthcare field are not subject to the $50,000 loan maximum, refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for more information about refinancing ParentPlus loans.

ELIGIBILITY & ELIGIBLE LOANS

Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).

Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.

All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.

For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.

INTEREST RATES

The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.

DISBURSEMENT OPTIONS

The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.

POSTPONING OR REDUCING PAYMENTS

After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.

We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.

We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.

If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.

KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

This information is current as of November 8, 2019 and is subject to change.


4 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.


5 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 1.9299999999999997% effective October 10, 2019.


6 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 11/07/2019 student loan refinancing rates range from 1.90% to 8.65% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.

 


7 Important Disclosures for College Ave.

College Ave Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

1College Ave Refi Education loans are not currently available to residents of Maine.

2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.

4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 09/23/2019. Variable interest rates may increase after consummation.

1.81% – 6.49%1Undergrad
& Graduate

Visit Earnest

2.31% – 7.36%2Undergrad
& Graduate

Visit SoFi

1.99% – 6.65%3Undergrad
& Graduate

Visit Laurel Road

2.43% – 7.60%4Undergrad
& Graduate

Visit Splash

2.02% – 6.30%5Undergrad
& Graduate

Visit CommonBond

1.90% – 8.65%6Undergrad
& Graduate

Visit Lendkey

2.74% – 6.24%7Undergrad
& Graduate

Visit College Ave

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

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