What You Need To Know About Store Credit Cards

Pitches to save 10 to 15 percent on a day’s purchases by opening a store credit-card account can sound pretty appealing, especially when you’re spending a bundle on holiday gifts—but store cards can have some drawbacks, like sky-high interest rates. ShopSmart magazine shows you when to say yes to a store card, as well as some of the best programs on offer.

Sign Up For a Store Card If . . .

It Won’t Ding Your Credit Score

Opening too many store accounts at once will lower your score. Instead, pick a bank card with the lowest interest rate you can find.

You Know What You’re Getting

Many retailers offer a co-branded credit card, which is imprinted with an American Express, Discover, MasterCard, or Visa logo. If you choose a co-branded store card, don’t use it at other locations unless it gives you the best reward. 

ShopSmart’s Picks for Top Store Cards


  • APR: 13.24%, 18.24%, or 21.24%
  • What you get: 3% back on Amazon purchases; 2% on gas, restaurants, and drugstores; 1% elsewhere. You can take rewards as cash, gift cards, or Amazon points.  

Banana Republic/Gap/Old Navy/Piperlime/Athleta

  • APR: 17.24% to 22.99%
  • What you get: 5 points for every $1 spent at the five retailers, 1 point for every $1 elsewhere. 1,000 points earns a $10 gift certificate.

Costco American Express

  • APR: 0% for six months, 15.24% after
  • What you get: 3% back on gasoline purchases of up to $3,000 annually, 1% after; 3% for restaurants; 2% for travel, 1% everywhere else, including Costco. Rewards earned as cash back issued annually. American Express does not impose its annual fee.   

For more information about the November 2010 issue of ShopSmart click here.

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