The Smart Ways to Apply Store Credit Cards for Your Shopping
by Pijus Maity Banking 21 January 2025
Since 2018, store credit cards have become widely accepted and used by consumers who love to shop. This can be attributed to the significant benefits credit cards offer shoppers. As a strategy to retain their frequent shoppers, some stores, in partnership with card issuers, provide a retail shop credit card.
This credit card gives the cardholders access to offerings that are usually not publicly available, like reward and loyalty programs, first-time discounts, and others, which will be highlighted in this article.
Before its widespread use, shoppers were very reluctant to use the card. This reluctance came as a result of the speculation surrounding the very high annual percentage rate [APR] that comes with store payment cards. However, despite the alleged high APR, consumer interest has continued to climb, as displayed by a 2024 report where 58% of Americans chose to have a store credit card over 42% who prefer Buy Now, Pay Later [BNPL] loans.
Store credit cards have benefits that can be maximized for a valuable shopping experience. In subsequent paragraphs, we will explore strategic ways to apply these credit cards for your shopping.
Should You Get a Store Credit Card?
Store payment cards are not for everyone. While the benefits seem enticing, it is important to note that they are made for frequent shoppers of a particular retail shop. If you frequent one store and tend to spend a lot, store payment cards are a better option compared to general-purpose cards.
The benefits offered are what makes them a better option for you. Retail shop credit cards offer cardholders special discounts within the range of 5%-20%, or more, in some cases.
For people who shop frequently at a particular shop, these savings can add up and help them spend less on shopping items. When you apply for store cards, you can get exclusive access to sales events where there are more product offerings or huge discounts. However, if you are a sporadic shopper, and shop at different places in small units, a store payment card might not be a good option for you.
Getting multiple cards from different units only builds up the credit loan on the cards and increases your APR if you do not balance them all monthly.
Leveraging Reward and Loyalty Programs
Beyond discount offers, store payment cards grant you access to reward programs such as point-based systems, VIP status, and cashback offers. How can you leverage these incentives as a cardholder?
- Point-based system
Like a simple game, shops offer you points for every dollar spent. It’s a system that helps cardholders get value for their money. Imagine earning two points for every dollar you spend at a shop. That means for every $5, you are earning 10 points. These points are eventually stacked and offered to you as money.
For example, every 10 points you earn on $5 could be calculated and given to you as a $6 reward. To take advantage of this, ensure that the retail shop payment card offers a good point system that can help enhance your shopping experience and balance your finances.
- Cashback offers
Instead of point-based rewards, some retail shops use a different points system. They offer a straight cash back on purchases instead of rewarding you points.
The rate on some cashback offers is within the range of 1%-5% of the purchase amount. It is important to note that these higher cash-back rates only apply to purchases made directly with the retailer that issued the card. This means that you cannot apply this cash-back rate at other retail shops.
Additionally, you cannot use a payment card from one store to another. Except the other retail shop you are shopping at is another branch of the same store that issued you the card.
- VIP status
As a retail shop credit cardholder, you may also be eligible for additional perks like a special VIP status. How does this benefit you? As a cardholder at the store, you get access to exclusive sales events and promotions.
Having a VIP status further unlocks more benefits, such as birthday discounts, members-only sales, and maybe free shipping.
Visit here: https://www.nerdwallet.com/article/credit-cards/what-is-a-co-branded-credit-card for additional information on store payment cards.
Finally, Use Your Store Credit Card Strategically
After understanding the benefits that come with owning a retail shop payment card, knowing the best ways to use it puts you at an advantage. Here are things you have to consider:
- Time your application
Before applying for a store credit card, ensure it is not done at a time when you are in bad credit. If your goal is to build your credit score, avoid applying for multiple retail shop cards that could potentially lead you to having a higher loan.
If you have to get retail shop cards from different stores, ensure it isn’t done at the same time. Space your application and leave months in between each application.
- Find out the card APR and fees.
As stated in the 2024 report mentioned earlier, the average APR now tops 30%—the highest it has been since 2018. Click here to understand the pros and cons weighed in the report.
One of the smart things to do before applying for a card is to check for their APR. APR is the annual interest rate charged on your credit card balance.
Store payment cards reportedly have a higher APR than general-purpose cards. Knowing the APR before applying helps you to weigh your options and discover if you are financially capable of paying the APR in case of a balance.
Final Words
There are more benefits to explore with a retail shop credit card. However, following the smart ways mentioned in this article helps you to get the most out of it.
As noted in the earlier paragraphs, it is important to know if a retail shop credit card is really needed. If it is, acquaint yourself with the reward and loyalty programs for an enhanced shopping experience.
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