Best Store-Specific Credit CardsWith so many big chain stores offering a broad range of products and deals, it makes sense to do most of your shopping in one place, especially since it also saves time and gas money. Is there a way to stretch that advantage even further? You bet your bottom dollar there is. Say hello to the store-branded credit card!
While your current credit card may have a ton of great benefits, it's probably hard-pressed to save you as much money as the loyalty benefits on a store-branded card. These cards don't even require you to have great credit to apply! Of course, there are some drawbacks, and store cards most certainly aren’t a replacement for your day-to-day plastic. They're often "closed-loop," meaning you can only use them at the issuing store. Interest rates tend to be high, so you don’t want to carry a balance on your account! What are they good for, then? Store-specific cards can offer you significant savings, especially if you go to a one-stop shop for most or all of your needs. If you shop at the same place a lot and don't intend to carry a balance, a store-specific card could save you hundreds of dollars per year.
Here's a list of some of the top store-branded credit options for you to consider.
AmazonSaying Amazon is a good place to shop is like stating that the sky is blue. Nice observation, Sherlock. Fortunately, Amazon offers their Amazon Prime Store Card®. It features an unlimited 5% back as a credit on your statement, an impressive promotional financing at 0% from 6 to 24 months on any purchases that come to a total of $149 or more, and no annual fee.
Any Catches? - Indeed, there are! You can only use this card on Amazon, and you have to be an Amazon Prime member to be eligible. That's not so bad, however, as an Amazon Prime membership will get you most products at a low price, with free 2-day shipping included. However, if you're late on paying your balance, you'll be hit with deferred charges on that promotional financing. There’s also an ongoing, variable purchase APR at an incredibly high rate of 26.99%! As we mentioned above, it’s a good idea to avoid carrying a balance.
Final Thoughts - Is this card the right choice for you? If you're a Prime member and shop almost exclusively at Amazon, it does offer better value than a regular card. The low prices, free 2-day shipping, and unlimited 5% back on your statement are hard to beat! However, if you're not a frequent Amazon shopper, or if you're likely to be late on paying your balance off, it's probably not the best option for you.
TargetYou've probably rolled down the aisles of Target a few times. It’s a good thing they offer the Target REDcard®. This card comes with some great features and doesn't require you to redeem a bunch of reward points after collecting them for an eon. With this little red wonder, you get the benefits upfront. How does 5% off on every single purchase at Target sound? Grab your abacus and see just how much you’ll save each year from that benefit alone. There’s even more. Online (Target.com) purchases come with free shipping and an additional 30 days for returns. Most cards in the United States are "chip-and-signature," whereas this one is "chip-and-PIN" enabled, making it one of the few that offer extra protection against fraud and theft. There’s also no annual fee!
Any Catches? - There are two sides to every story. Unfortunately, you can only use this card at a Target store or Target.com. The real catch is no 0% financing offer, and the ongoing 23.90% interest rate is a bit steep. Fancy keeping a balance? Once again, that’s a bad idea.
Final Thoughts - Is this card a good idea? It all depends on how much you shop at Target. Most regular credit cards don't offer bonus rewards for shopping at superstores like this one. It's great that the Target REDcard® gives you the discount upfront, without having to go through a complicated redemption plan. If you do most of your food, clothing, and even furniture shopping at Target, and are sensible with your money, the 5% discount combined with the free shipping offer could save you a few hundred dollars per year.
On the other hand, the card’s lack of a 0% financing offer and its interest rate of 23.90% is enough to make anyone hesitate! Of course, that would only affect you if you carry a balance. If you can avoid doing that, this offer is a good deal for Target fans.
Best BuyAdmit it, you went in looking for a keyboard but wound up watching Finding Nemo on the biggest TV you could find. Best Buy’s lovely establishment offers the My Best Buy® Credit Card. To use this card, you will have to join the My Best Buy frequent shopper program since you earn rewards as points, and there is a level system: Basic, Elite, and Elite Plus. Your level depends on how much you spend at Best Buy in a calendar year. The basic level is for anyone spending less than $1,500 each year, while $1,500 will get you into the Elite level, and $3,500 will get you to Elite Plus.
You also get to choose which rewards program sounds best for you; either deferred-interest financing on any big purchases or a percentage of cash back on regular ones. Elite Plus level members get 6% back, while everyone else gets 5% back. What’s more, there's no annual fee for either program.
Any Catches? - You'd probably agree that an interest rate of 11.74% to 28.99% is a drawback indeed! If your creditworthiness puts you on the higher end of the APR scale, it’s a bad idea to keep a balance on this bad boy. A bad credit score might also land you with a $59 annual fee. Finally, you can only use this card at Best Buy, but you're probably not surprised by that anymore.
Final Thoughts - Seeing a pattern by now? If you shop at Best Buy a lot, this card could save you a boatload of cash each year. Five percent back is good, but that 6% is more than most store-branded cards offer. The same wisdom applies, though, for any of you serial Best Buy shoppers. If you keep that balance paid off, this card is worth a look.
Good RemindersHere are some important reminders and additional tips:
These are "closed-loop" cards. You can only use them at the corresponding store.
Always pay your balance in full. The high APR can empty a wallet quicker than a rigged casino.
These cards have low credit limits, so carrying a balance could hurt your credit.
If the card offers 0% financing, pay it in full before the offer ends! This feature is nothing more than deferred interest, so you'll be charged retroactive interest on your entire purchase if you pay late.
These cards are not a replacement for your general-purpose credit cards.
Now be a smart shopper and save even as you spend. If you make an informed decision and spend responsibly, you’ll surely reap the benefits of the card options on our list. Have fun!
See them here:
Amazon Prime Store Card®
My Best Buy®