Store card vs credit card

Store Card vs Credit Card: What’s the difference?

Store card vs credit card, When it comes to plastic in your wallet, you’ve got options. Two of the most common are store cards and credit cards. But what exactly sets each one apart? While they may seem similar on the surface, store cards and credit cards have some key differences when it comes to how they work, the perks they offer, and more. Read on for a breakdown of everything you need to know about store cards vs credit cards.

The History and Evolution of Store Cards

Retailers first began offering store credit cards to loyal, trustworthy customers who had good payment histories. It was a way to reward and incentivize top spenders to keep shopping at their stores. Over time, the concept expanded and today many people opt for the convenience of bank credit cards that can be used virtually anywhere. But store cards still offer some unique benefits that appeal to frequent shoppers of a particular brand.

Store Cards 101

A store card is a credit card that can only be used at one retailer or group of retailers. Store cards are sometimes also called private label credit cards.

Some of the most popular store cards include:

  • Amazon Store Card
  • Target REDcard
  • Walmart Credit Card
  • Best Buy Credit Card
  • Lowe’s Advantage Card

The biggest perk of store cards is that they tend to offer better rewards and discounts for shopping at that particular store. For example, the Amazon Store Card gives you 5% back on Amazon purchases. And the Target REDcard gives you a 5% discount on everything you buy at Target.

Store card terms, benefits, and application processes vary between retailers. But in most cases, store cards tend to have lower credit limits and higher APRs compared to traditional credit cards. The credit limits are usually between $500-$2,000. And APRs generally range from around 24% to 28%.

Read: Does Checking Your Credit Score Lower It?

Credit Card Basics

Credit cards can be used at millions of places worldwide. Popular credit card networks include Visa, Mastercard, American Express, and Discover.

Some of the most common credit card issuers are:

  • Chase
  • Citi
  • Capital One
  • Bank of America
  • Wells Fargo

Credit cards allow you to earn rewards on all your spending. Popular rewards you can earn include:

  • Cash back
  • Points
  • Miles

Credit cards also come with benefits like purchase protection, extended warranties, and rental car insurance.

Credit limits are usually higher with credit cards, commonly $3,000+ for folks with good credit. And APRs are generally lower, often between 12-20%.

Key differences

Now that we’ve covered the basics, let’s compare some of the key differences between store cards and credit cards:

Where they can be used

Store cards – Can only be used at that store’s locations and website. So a Macy’s card could only be used at Macy’s, for example.

Credit cards – Can be used virtually anywhere that accepts credit cards – from retailers to restaurants to travel sites and more.

Credit limits

Store cards – Tend to have lower credit limits, usually $500-$2,000.

Credit cards – Generally have higher limits, often $3,000+ for folks with good credit.


Store cards – Usually have APRs around 24-28%.

Credit cards – Often have lower APRs, typically between 12-20%.

Rewards & discounts

Store cards – Offer better rewards and discounts for purchases at that particular store. For instance, 5% or more back.

Credit cards – Provide rewards on spending anywhere, but the rates are usually lower. Think 1-3% back.


Store cards – No annual fee in most cases.

Credit cards – May charge annual fees, depending on the card. Usually $0, $95, $450+.

Return policies

Store cards – Often have more generous return policies than credit cards. Items can sometimes be returned months or years later.

Credit cards – Return policies vary based on the retailer. Time limits are usually shorter.

Application process

Store cards – Applications are often quicker and easier, sometimes even instant approval.

Credit cards – The application process can take longer, a week or more. Approval is based on your credit report.

Impacts on credit

Store cards – Having a store card account reported to the credit bureaus can help build your credit score over time.

Credit cards – Also help build credit history when used responsibly. Generally seen as better for your score than store cards.

Balance transfers

Store cards – generally don’t allow balance transfers from other cards.

Credit cards – Many offer 0% intro APR balance transfer options, allowing you to save on interest.

Debt settlement considerations

If you’ve accumulated significant credit card debt that feels overwhelming, debt settlement may be an option. This involves negotiating with creditors and collection agencies to settle accounts for less than the full balance owed. Many people pursue debt settlement after credit card balances have become unmanageable. When exploring settlement, be sure to work with a reputable company and understand the potential impacts to your credit.

Store Card vs Credit Card: Which is better for you?

So should you open a store card or credit card? Here are a few things to consider:


  • If you frequent one store often – A co-branded store card could be worthwhile for the extra discounts and rewards you’ll earn there. Just beware of high APRs.
  • If you shop at many different places – A general credit card that offers rewards on all purchases is likely the better fit. You’ll have a lower APR and more flexibility too.
  • If you’re working on building credit – Using a store card responsibly can help strengthen your credit profile. But having a credit card account is seen as more valuable by the credit bureaus.
  • If you want to avoid annual fees – Store cards generally don’t have annual fees. Many credit cards do, so a store card would save you money each year.

As you can see, there are pros and cons to both options. The best card depends on your spending habits, credit needs, and more. Consider what’s most important for your situation as you decide between a store card or credit card.

While store cards and credit cards have some similarities, they have key differences when it comes to where they can be used, credit limits, APRs, rewards, fees, return policies, and more. Store cards offer great discounts at one retailer but have limited usage. Credit cards provide flexibility and better rates, but come with fees in some cases. Pick the one that best aligns with your spending and credit profile needs. And use wise credit practices no matter which card you choose.

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At Second Start Financial, we are dedicated to helping you regain control of your life. Our mission is to provide you with effective debt relief solutions that address your unique financial situation. With a team of committed debt specialists, we work tirelessly to deliver the results you need to move forward with confidence.

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