by Lyle Daly | Updated Aug. 12, 2021 - First published on Oct. 30, 2020
Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
If you're one of the many Americans with a store credit card, it may be time for an upgrade.
To no one’s surprise, Visa is the most popular type of credit card. In our research of credit card market shares, just over 49% of American adults had Visa credit cards.
However, second place was much more interesting. It belonged to store credit cards, as a little over 44% of Americans had this type of card. That figure was more than the number of Americans carrying Mastercard, Discover, or American Express cards.
Although store cards have their uses, they also have some notable flaws. If you have a store credit card, you could probably benefit by switching to a different type of card.
Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
The popularity of store credit cards is mainly due to good marketing. Retailers push their cards at every opportunity. While you're checking out online, you'll see a link to get the store's card. And at the store itself, the cashier will ask if you want to apply. So when you're shopping there anyway and see an offer to save money with a store credit card, signing up seems like a no-brainer.
To make the offer more enticing, store cards often include special introductory deals. Discounts of 10% or more off your purchase are common, as are 0% intro APR financing offers. These deals usually don't come close to what you can get with other credit card sign-up bonuses, but many shoppers don't realize that.
Store credit cards also tend to be easy to get. Most are available to consumers with fair and sometimes even bad credit. So, not only do stores get lots of credit card applicants because of their marketing, they also approve quite a few.
The biggest issue with store credit cards is how limited they are. A standard store card only works at that store (there are exceptions, as some stores offer cards connected to payment networks, most often Visa or Mastercard).
Most store credit cards require you to redeem your points at the store itself. That works fine when you have something you want to buy there, but when you don't, you're not saving any money.
Other types of rewards credit cards don't have this problem. A cash back card gets you money back, and a travel card can get you free travel. You can always save money with these cards.
High APRs are also common with store cards. This isn't a problem if you pay your bill in full every month. But if you ever carry a balance, the interest charges could be costly.
You can likely find better offers for any perks that a store credit card has. Here are the most common reasons to open a store credit card -- and smarter alternatives:
A store credit card isn't always a poor choice. It may be a good idea if you're building credit and can't qualify for the top credit cards yet. Or, if you shop at the store often, then opening its credit card could be worthwhile. But a store card shouldn't be the only credit card you have. There are a slew of other options that will get you more value on your everyday purchases.
If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR into 2023! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read The Ascent's full review for free and apply in just 2 minutes.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.