How These 3 Store Credit Cards Save Me Hundreds Each Year

Well-curated retail cards can be a valuable addition to your card collection.

Credit cards are one of my hobbies. Even in my leisure time, I like to research new cards and explore the latest offers. I also really enjoy fine-tuning my credit card rewards strategy in an ongoing effort to maximize every single dollar I spend.

As much as we tend to critique store credit cards, any effort to truly maximize rewards will likely include at least one of two retail cards. Not only do these cards generally offer brand perks, like free shipping and exclusive discounts, but they also often have the highest rewards rates for their stores.

This is especially true of stores not typically covered by your average bonus rewards category. Some quarterly rotating cards do offer occasional bonuses. Even so, the dedicated, year-round rewards can make it worth adding a store card or two -- or, in my case, three. Here's a look at three no-annual-fee store credit cards that have helped me save hundreds of dollars through discounts and rewards.

1. Target RedCard: 5% discount and free shipping

The most obvious benefit of the Target RedCard is its automatic 5% discount at checkout. Yes, rather than traditional cash back that needs to be redeemed later, cardholders simply get 5% off their eligible total when they pay with their RedCard.

Since several of my favorite household brands can be found at Target, that 5% discount provides a decent amount of savings each year. Cardholders also enjoy free shipping on a lot of items. That's something I've come to really appreciate -- especially over the last year when we've been limiting the amount of time we spend inside stores.

2. Amazon Prime Rewards Visa: 5% cash back and Chase deals

I don't love relying on Amazon when I could be shopping locally, but let's face it -- sometimes it's just necessary. Everyday items, like batteries and charging cables, are so much more affordable through Amazon. It's hard to justify paying 10 times more elsewhere. My family also enjoys several of Amazon's digital services, like Amazon Music and Prime Video, which definitely adds up throughout the year.

When all's said and done, the 5% cash back I earn on Amazon purchases year-round with my Prime Visa card makes it a valuable addition to my wallet. And that's before you consider the various discounts you can activate through Chase, like the 10% bonus cash back on digital services I cashed in on last month.

3. Kohls Charge Card: 35%-off sign-up discount and regular savings

At face value, the Kohl's Charge Card isn't necessarily as valuable as the other cards on this list. It doesn't have regular purchase rewards and basic cardholders don't get free shipping. So, what's the draw? For me, it was the big discount for signing up: 35% off your first card purchase.

I'd saved up for a few months to upgrade a few of our small appliances and other household items (something we'd wanted to do for quite a while). When I finally caught most of them on sale, I piled my cart high and signed up for the card. When my 35% discount was applied, I knocked more than $100 off my total.

While that's not the largest sign-up bonus I've ever earned, it certainly didn't suck. Plus, as a cardholder I'll receive regular discount offers throughout the year, something that will likely come in handy for future holidays.

Make sure the savings are worth the potential drawbacks

Store credit cards can save you a lot of money -- but they're not without their downsides. For one thing, most store cards are closed-loop, which means they only work with a single retailer. That said, a handful of store cards have network logos (Visa, Mastercard, etc.) and work anywhere.

A store credit card also impacts your credit score just like any other credit card. Applying for a store credit card will mean a hard credit inquiry, and opening a new store card account will lower your average account age. All this means that opening a new store card can reduce your credit score.

Additionally, store credit cards have notoriously low spending limits. I have a credit score of over 800, and most of my store credit card limits are below $1,000. Store cards also come with exceptionally high APRs. This one-two punch means any balance you carry will likely spike your utilization rate and cost you a fortune in interest.

If you know you'll save a bundle with a store card, and you're sure you'll pay it off in full every month, it can be worth the hassle. Just make sure you know what you're getting into before you say yes to the cashier's offer of a shiny new store credit card.