Why Most Store Credit Cards Aren't Worth It (and What to Use Instead)

You know the pitch. You're at the checkout counter, and the cashier says, "Want to save 20% today by opening a store card?"

I've fallen for it in the past at Macy's. And regretted it later when the card got hacked and it became an absolute nightmare to resolve.

Honestly speaking, most store credit cards are duds in disguise. Here's why.

1. Weak and fleeting rewards

To their credit, some store cards offer a pretty great deal upfront. I still remember the Macy's card I got came with something like 40% off my entire order. How could I say no to that?

But the catch was it's just a one-time thing. After the first purchase, the perks kind of vanished.

Even the store cards that do offer ongoing "X% back" deals are usually only good at that one retailer. And the rewards often come as store credit, not cash back. That means you're locked into spending with them again -- even if you don't want to.

2. Ridiculously high APRs

The national average APR on regular credit cards is already over 21%, which is kinda wild when you think about it.

But store cards take things to a whole 'nother level. Around 30% APR is typical -- many are even higher.

One late payment or carried balance, and boom -- you've pretty much wiped out that 20% "new customer" discount from months ago… and then some.

If you're even thinking about carrying a balance, skip the store card and look at a good 0% intro APR card instead. Some offer 15 to 21 months interest-free, which can be a legit lifeline if you need time to pay things down.

3. Limited usability and low credit limits

Most store credit cards are "closed-loop," meaning you can only use them at that specific store.

Even if they're "open-loop" (i.e., can be used anywhere Visa or Mastercard is accepted), they often come with very low credit limits.

That might not sound like a big deal, but it can really hurt your credit utilization ratio.

I've seen folks open a store card with a $500 limit, spend $300 on one trip, and then get dinged because they're using 60% of their available credit. (Experts recommend keeping utilization at max 30%.)

You're better off with a flat-rate rewards card and a much higher limit.

4. Easy to forget, hard to manage

My old Macy's card sat untouched in a drawer for years. I figured there was no harm in just keeping it active, right? Wrong.

One day, I got an alert that someone had hacked into my Macy's online account online and used the saved card info to go on a shopping spree.

It was a bit of a nightmare to resolve. But thankfully I caught it quickly and it didn't screw up my credit.

Having too many credit cards (especially store cards you barely use) makes things way harder to track. You can miss bills, due dates, and have more security vulnerabilities. It's just more noise in your financial life.

And trust me -- I'm a credit card nerd. I've opened 30+ credit cards over the years to score different rewards and perks. But the older I get, the more I value simplicity.

One awesome rewards card beats 10 mediocre ones any day.

A few exceptions that might be worth it

To be fair, not all store cards are garbage.

If you shop somewhere all the time -- and I mean all the time -- and the card offers ongoing value, it might actually be worth it.

For example, Target offers a store card that gives discounts on nearly all purchases, plus extra perks like extended return windows. If Target is your go-to for groceries, diapers, or household stuff, it could make sense.

Personally, I use Amazon's Prime Visa because it earns some of the highest rewards on my everyday Amazon and Whole Foods purchases -- plus extra perks when I book travel through Chase.

It's technically a "store card," but it's so flexible and rewarding within the Amazon ecosystem which I always spend in.

Costco also has a fantastic credit card for members. My friends swear by it and get a ton of value each year because they shop there often.

So yeah, there are a few diamonds in the rough. But they're the exception, not the rule.

Final thoughts

Store credit cards might seem like an easy way to save money at checkout. But in most cases, they're a trap.

Instead, look for cards that reward your real-life spending -- everywhere, not just one store.

Want a card that rewards your grocery runs and gas station stops? Check out our picks for the best credit cards for everyday gas and grocery spending.