Source: Flickr user Mike Mozart.

The Banana Republic credit card, issued by Synchrony Bank, is designed to reward customers who shop at Gap's brands -- Banana Republic, Gap, Old Navy, Piperlime, and Athleta. Like most store credit cards, this one offers the opportunity to earn rewards at a higher rate than you could obtain with a traditional credit card, but it comes at a cost.

So, let's take a closer look and see if the Banana Republic credit card might be a good fit for you.

Good rewards program
Many store cards attract customers by offering better rewards and promotions than other credit cards, and the Banana Republic credit card is one of them.

The card is available in two varieties -- a co-branded Visa card, as well as a store-only card. Both earn rewards at a 5% rate on purchases at all Gap-branded stores, and rewards are issued in $10 increments. Holders of the Visa card also earn 1% back in rewards on all other purchases.

In addition, customers get 15% off their first purchase upon opening an account and also receive special cardholder promotions, birthday offers, and opportunities for various bonuses, like 2,000 bonus points for agreeing to get email updates, and 500 bonus points for choosing paperless statements.

Cardholders who spend more than $800 per year at Gap-brand stores will be upgraded to the "Luxe" version of the card, which comes with some additional benefits. Luxe cardholders get free alterations on Banana Republic purchases as well as access to special Luxe shopping events. They also receive free shipping, which can be valuable for customers who shop online.

Finally, it's also worth mentioning that the Banana Republic credit card has "sister" programs issued with both the Gap and Old Navy brands. So, customers who do more of their shopping in those brands would probably be better off with one of those cards, which offer pretty much the same rewards, but issued at those stores instead.

A word of caution
While store-branded credit cards generally offer a generous rewards program, borrowing usually comes at a relatively high cost.

The Banana Republic cards don't have an annual fee, but they do have higher-than-average interest rates of 23.99% for the Visa card and 24.99% for the store-only card, and both rates vary according to the prime rate. For reference, the average APR for a variable-rate credit card is 15.85% as of this writing.

What this means is that store credit cards like the ones issued by Banana Republic are best for consumers who pay the bill in full each month. If you plan to carry a balance, you can probably get a significantly better interest rate from a traditional (non-branded) credit card.

The bottom line
For shoppers who plan to pay their credit card bills in full every month, the Banana Republic credit card is a great way to earn rewards and get access to special deals and promotions, and it can be an especially good deal for customers who spend a lot at Gap brands. However, it's important to keep the high interest rate in mind before charging any purchases you can't pay back right away.