The best store credit cards of December 2019

Dec 1, 2019

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As we dive head-first into the holiday shopping season, you might wonder if it’s worth it to apply for a store credit card to help you save on purchases. Retail stores often pitch store credit cards to customers at the register, enticing you with a discount on your purchase. Typically speaking, store credit cards aren’t a great idea and are unlikely to rank among TPG’s pick for the all-around best credit cards. The welcome bonuses usually aren’t great, rewards aren’t flexible and APRs are higher than average. However, most Americans do have at least one store credit card, and I’ll admit there are a few occasions when getting a store credit card makes sense.

Today, I’m walking through the best store credit cards, as well as some alternative rewards credit cards you can use to maximize those same purchases.

In This Post

Best Store Credit Cards

Capital One® Walmart Rewards™ Mastercard

Annual fee: $0

Welcome offer: Earn 5% on in-store Walmart purchases (including Murphy USA and Walmart gas stations) for the first 12 months when you use Walmart Pay

Rewards rate: Earn 5% at Walmart.com and in the app; 2% back on in-store Walmart purchases (including Murphy USA and Walmart gas stations) and travel and restaurants

When it makes sense to apply: Walmart purchases are almost always excluded from supermarket and grocery store bonus categories, with the exception of the occasional rotating bonus category. If you’re shopping almost exclusively for groceries and other expenses at Walmart, get gas at Walmart fuel stations and utilize Walmart’s online shopping services, it makes sense to look at a card that earns rewards at Walmart. The good thing about the Capital One Walmart Rewards Mastercard is that you’re earning cash back on your purchases that can be used as a statement credit, gift cards or redeemed for travel through Capital One. You aren’t limited to using these rewards for just Walmart purchases like some other store cards.

Amazon Prime Rewards Visa Signature

Annual fee: $0 (but you must have a Prime Membership, at $119 a year)

Welcome offer: N/A

Rewards rate: Earn 5% back on Amazon and Whole Foods purchases; 2% at restaurants, gas stations and drugstores

When it makes sense to apply: If you already have an Amazon Prime membership and regularly spend money at Amazon and Whole Foods, this is a solid store card to have in your wallet. Amazon is another merchant that isn’t often included as part of other cards’ bonus categories, and you’re actually earning decent rewards across other regular spending categories as well with 2% back on dining, gas stations and drug stores. Those rewards can be redeemed toward Amazon purchases, cash back, gift cards or even travel, making this a versatile card for any Amazon Prime lover.

Target REDcard

Annual fee: $0

Welcome offer: N/A

Rewards rate: Get a 5% discount on all eligible Target purchases

When it makes sense to apply: This card doesn’t earn rewards, but it does come with a 5% discount on every eligible Target purchase, both in store and online. Since Target doesn’t earn bonus rewards with many other cards, frequent shoppers can save a lot of money annually with by using this card on Target purchases. You’ll also get a 10% discount coupon every year (which I would strategically use on larger purchases), 30 extra days for returns and free shipping on most Target online purchases. This certainly isn’t a lucrative card, but for no annual fee, it’s worth it if you frequently shop at Target.

Costco Anywhere Visa® Card by Citi

Annual fee: $0

Welcome offer: N/A

Rewards rate: Earn 4% cash back on eligible gas (up to $7,000 per year; then 1%); 3% on restaurants and eligible travel purchases; 2% on all other purchases from Costco online and in store

When it makes sense to apply: If you’re a dedicated Costco fan who already has a membership (which costs $60 for Gold Star and $120 for Gold Star Executive), this card doesn’t come with an annual fee. While you’re only getting 2% on general Costco purchases, this is actually a decent Swiss Army knife card if you want to earn cash back across multiple spending categories. You’ll also get extended warranty and travel benefits such as car rental insurance and roadside assistance. The downside? You have to wait an entire year to get your cash-back rewards and you must redeem them at Costco for either merchandise or cash back. Costco mails out cash rebates once a year instead of letting users redeem at any point in the year.

The information for the Capital One Walmart Rewards, Target REDCard, Amazon Prime Rewards Visa Signature has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Rewards cards to maximize store purchases

If you don’t think you’d be able to justify having a specific store card, there are rewards credit cards that will help you maximize store purchases instead.

Chase Freedom

Annual fee: $0

Welcome offer: Earn $150 after you spend $500 on purchases in the first three months

Rewards rate on store purchases: 5% on up to $1,500 spent on quarterly rotating categories

Standout benefits: You could earn up to $300 each year in bonus cash back if you’re maximizing categories every quarter. These categories vary, but you’ll typically find department stores make an appearance at least once throughout the year. Since department stores often have their own retail cards they try to market, the Freedom is an excellent alternative choice. If you have a Chase Ultimate Rewards card — such as the Chase Sapphire Reserve, the Chase Sapphire Preferred or the Ink Business Preferred — you’ll also be able to pool your rewards and redeem for travel through the Chase portal for a bonus or transfer to an airline or hotel partner.

Chase Freedom Unlimited

(Photo by Isabelle Raphael / The Points Guy)
(Photo by Isabelle Raphael/The Points Guy)

Annual fee: $0

Welcome offer: Earn $150 after you spend $500 on purchases in the first three months

Rewards rate on store purchases: Earn 1.5% back on every purchase

Standout benefits: While the Freedom Unlimited isn’t as flashy as some of the other rewards rates on this list, remember that you’re getting a guaranteed 1.5% cash back on every single purchase. If you aren’t particularly loyal to one store for your shopping needs, this is a great card to help make sure you’re earning bonus rewards no matter what. And just like with the Chase Freedom, you can pair the Chase Freedom Unlimited with other Chase cards to maximize your redemption options.

Citi® Double Cash Card

Annual fee: $0

Welcome offer: N/A

Rewards rate on store purchases: Earn 2% back on purchases — 1% when you buy and 1% when you pay your bill

Other standout benefits: Similar to the Chase Freedom Unlimited, the Citi Double Cash earns flat-rate cash back across all purchases. Whether you’re shopping at Walmart, Target, Macy’s or any store in between, you’ll be able to get 2% back with this card. Plus, Citi recently announced that you can convert Citi Double Cash rewards into ThankYou rewards, which makes this card even more valuable.

Bank of America® Premium Rewards® Visa® credit card

Annual fee: $95

Welcome offer: 50,000 points after you spend $3,000 in the first 90 days

Rewards rate on store purchases: 1.5x on everyday purchases

Standout benefits: For just a $95 annual fee, the Bank of America Premium Rewards card packs a punch. You’ll get 2x on dining and travel purchases, 1.5x on all other purchases, a $100 TSA PreCheck/Global Entry application fee credit and a $100 airline fee credit. If you qualify for Bank of America Preferred Rewards (determined by how much money you have stashed away with the bank), you could also earn 75% more on purchases. That would mean 2.62x on every purchase, including those made across stores. That’s a better return than even the Citi Double Cash.

Discover it® Cash Back

Annual fee: $0

Welcome offer: Discover will match the cash back you earn at the end of your first year

Rewards rate on store purchases: Earn 5% back on up to $1,500 in rotating quarterly categories

Other standout benefits: The Discover it® acts similarly to the Chase Freedom. You’ll get up to $300 every year in cash back if you maximize the rotating categories each quarter. Multiple stores that offer their own credit cards pop up on the cash-back calendar every year (including Walmart, Target and Amazon), which makes this an excellent alternative for anyone looking for cash-back rewards. Plus, at the end of your first year with the card, Discover will match the cash back you earned. That means you’re effectively earning 10% back on bonus category purchases throughout your first year.

What do store cards offer cardholders?

Store cards generally offer high brand-specific rewards to cardholders. Some offer one-time discounts as welcome offers or ongoing discounts rather than straightforward rewards. You might also get “elite status” with the store that entitles you to exclusive sales and rewards. The more attractive store cards are “open loop,” meaning you can use them anywhere the payment network is accepted. However, some are private label or closed-loop, meaning they are only good at a specific store.

When does it makes sense to have a store credit card?

There are a few scenarios when it makes sense to have a store card. For one, if you’re spending thousands of dollars every year at a particular store that doesn’t earn decent rewards with a more general rewards card, the rewards earned through the store card might be worth it. One of my very good friends swears by her Macy’s card because of the discount she gets on every purchase. She’s shopping either in-store or online multiple times a month, and none of her other cards offer any meaningful rewards on department store purchases. Each year, her card probably saves her anywhere from $300-$500 between discounts, exclusive deals and free shipping. That makes it worth it for her to have the card.

NEW YORK, NY - SEPTEMBER 27: A view outside Macy
If you spend thousands of dollars a year at a certain store (such as Macy’s), it might be worth it to have the store credit card. (Photo by Noam Galai/Getty Images)

Those trying to build or repair their credit can also find that it makes sense to have a store credit card. Generally speaking, store credit cards are easier to get approved for than standard rewards credit cards. If you’re just starting out and don’t have enough credit established to be approved for a card like the Chase Sapphire Preferred Card, you might have better luck with a store card. Just make sure you’re choosing a store card that you will get value from (so don’t apply for an Old Navy credit card if you rarely shop there).

Once you’ve built up a good credit score and applied for a more substantial rewards card, you can still keep the store card (they generally don’t come with an annual fee) at the back of your wallet while you use your more rewarding card on the bulk of your purchases.

Bottom line

Store credit cards may not be as lucrative as travel credit cards or even top cash-back credit cards, but that doesn’t mean every store credit card is worthless. There are situations where it makes sense to keep a store card or two in your wallet to use on certain purchases, and there are actually a few store cards like the Amazon Prime Rewards Visa that make for decent all-around cards. However, you’re most likely going to be better off with a rewards credit card that provides a way to earn flexible rewards across a variety of purchase categories.

No matter what kind of card you’re in the market for, make sure you’re comparing your options and choosing the right card for your spending habits.

Related guides:

Chase Freedom Unlimited®

SIGN-UP BONUS: $150 after spending $500 on purchases in the first 3 months.

TPG'S BONUS VALUATION*: $150

CARD HIGHLIGHTS: No annual fee + earn 1.5% cash back on all purchases

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

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More Things to Know
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn unlimited 1.5% cash back on all purchases.
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49 - 25.24%.
  • 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5.
  • No annual fee
  • No minimum to redeem for cash back
  • Cash Back rewards do not expire as long as your account is open
Intro APR on Purchases
0% Intro APR on Purchases for 15 months
Regular APR
16.49% - 25.24% Variable
Annual Fee
$0
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.