Can you use store credit cards anywhere?
Quick insights
- In general, store credit cards can only be used at specific retailers or their affiliated brands.
- A store credit card may offer perks like store discounts but usage could be limited.
- Consider your spending habits and needs before applying for a store credit card.
You may have stood at the checkout counter of a retail store and been asked, “Would you like to save on your purchase today by signing up for our store credit card?” It can be tempting to agree in that moment, especially knowing there’s a chance for immediate savings.
Before signing up however, make sure you fully understand the limitations of where you can use this card, as well as potential implications to your credit score.
What is a store credit card?
A store card is a credit card that can only be used in a specific store or group of stores. For example, if you have a store card with the apparel retailer Gap®, you may be able to use it within their network of brands, which include Old Navy®, Banana Republic® and Athleta®, but nowhere else.
Don’t confuse a store credit card with a store loyalty card. That is a rewards program which lets you earn points when you spend in that particular store. Customers who join loyalty programs typically receive exclusive emails with coupons or opportunities to earn rewards.
Unlike loyalty cards, store credit cards allow you to borrow money. This means your unpaid balance will accrue interest charges if you do not pay it in full each month. One advantage for the store is that cardmembers are incentivized to shop within their retail ecosystem. One advantage for cardmembers is that they could receive exclusive promotions, discounts and perks.
Store credit cards may carry a higher annual percentage rate (APR) and lower limit than other unsecured credit cards.
Can you use store credit cards any other places?
Not usually, no. Store credit cards can only be used at specific stores (both in-store and online). Retailers partner with banks to offer lines of credit to their customers, and charges are generally limited to that retail store (and affiliates).
What is the difference between a store card and a co-branded credit card?
While store cards and co-branded cards are both credit cards that offer lines of credit, there are some key differences.
Co-branded credit cards
A co-branded credit card is a partnership between a card network (such as Visa® or Mastercard®), a card issuer or bank (such as Chase) and a retailer or other brand. You can use these credit cards anywhere you shop, not just with the brand that the card is associated with. Co-branded cards can serve consumers who are loyal to a particular brand and want to earn rewards or perks by using that credit card for the majority of their purchases.
Co-branded cards usually have the brand’s logo and name on the card, as well as a Visa, Mastercard, American Express or Discover logo. Chase has many co-branded cards to choose from including:
Store credit cards
A store credit card has a partnership between a bank and a retailer. You can use these cards at the store or family of stores the card is associated with. This type of credit card can serve consumers who frequently shop at that retailer and want to take advantage of the exclusive benefits offered.
Advantages and disadvantages of store credit cards
As with any time that you’re considering a credit application, you may want to weigh the pros and cons.
Advantages
- Approval criteria: Given that store cards are only valid at the specific brand or family of stores, there’s less risk to the lender. This may influence the approval criteria. For example, you may get approved at the point of sale.
- Sign-up discounts: Many retailers offer a discount, special financing or other promotions when you are approved for the store credit card.
- Cardmember perks: For some cards, you can get exclusive perks, such as free shipping, birthday surprises and early access to sales. Pair this with the store's loyalty rewards program, and you may find great value when shopping there.
- Builds credit history: If used wisely and paid off consistently, your payment history on a store credit card may help you build credit history and potentially boost your credit score.
- No annual fee: Unlike some general purpose credit cards, store cards may not charge an annual fee.
Disadvantages
- Limited use: Store cards cannot typically be used outside of their store or family of brands, limiting the ways you can use that line of credit.
- Lower credit limit: Store cards tend to have lower credit limits. This could affect your credit utilization ratio in a negative way.
- High interest rates: Store cards usually come with higher APRs than traditional credit cards. Interest can accrue quickly on unpaid balances.
- Inflexible rewards: The rewards you earn and redeem through a store card are exclusively limited to that retailer. With a general rewards credit card, you can earn points or miles on eligible purchases.
- Credit score may be affected: If you miss a payment or do not pay the minimum amount due at the end of the billing cycle, your credit score may be negatively impacted.
Should you open a store credit card?
If you have responsible spending habits, and your credit utilization isn’t too high, a store card might be a valuable asset—especially you are making a large purchase or frequently shop at that store. In addition, if you are trying to improve your credit score and feel confident you can pay off your balance each billing cycle, a store credit card might be helpful.
Keep in mind that a new card will show up on your credit report. The new line of credit and your utilization can affect your credit score. You may also want to confirm the APR and any fees associated with a store card before signing up.
In conclusion
Store credit cards may offer benefits that reward shoppers for their loyalty. But before you apply, think about how often you'll shop at that store and consider if the additional credit is worth it. With a higher APR and limited places to use the card, some consumers may prefer a rewards credit card that can be used virtually anywhere.
