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The Very Best (and Very Worst) Store Credit Cards

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Photo: Getty Images
Photo: Getty Images

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No matter where you're shopping, nearly every retail experience ends the same way: with a sales associate trying to convince you to open a store-specific credit card with the promise of perks and discounts.

From Saks to Nordstrom to American Eagle to Target, just about every major retailer has its own card. They're major cash cows for brands, but can be high-interest money pits for consumers. In just the first six months of 2014, 21.7 million store credit cards were issued to customers, and as of September, the total outstanding balance on these cards was a whopping $59.6 billion.

But not every store credit card is a waste of plastic, and some really do offer shoppers excellent rewards, major discounts, and a nice credit report boost. Below, we investigate the best—and worst—store credit cards on the market.

The Best

Gap Inc.
Can be used: Anywhere Visa is accepted
Credit score needed: Good
Interest rate: 23.99%
Things to know: You get 15% off your first Gap Inc. purchase, and then 10% off every purchase made on Tuesdays at Gap, Banana Republic, Old Navy, and Piperlime (yes, every Tuesday!). Each dollar spent at company stores translates into five reward points, while every dollar spent elsewhere gets you one reward point; for every 200 points you acquire, you get a $10 Gap Inc. credit. The dollar-to-rewards ratio is good, so big non-Gap spends like plane tickets will net you tons of in-store rewards. Important note though: While rewards have a nice life span, they do expire.

Amazon
Can be used: Anywhere Visa is accepted
Credit score needed: Excellent
Interest rate: 14.24%-22.24%, depending on credit
Things to know: Perks include a $30 Amazon gift card after approval and a 3-2-1 point system: earn three points for every $1 spent on Amazon, two points for every $1 spent at gas stations, drugstores, and restaurants, and one point for every $1 spent elsewhere. Every 100 points equates to $1 that can be redeemed on Amazon, though you can also redeem points for cash back, gift cards, or travel. This card is great for frequent Amazon shoppers (who isn't one at this point?), and particularly handy for students who can charge tuition on the card and put points towards textbooks, which are always better priced on Amazon anyway.

Nordstrom
Can be used: Anywhere Visa is accepted
Credit score needed: Good
Interest rate: 10.9%-22.9%, depending on credit
Things to know: You get $20 off the first $100 Nordstrom purchase you make on the card. You also earn two points for every dollar spent at Nordstrom, and one point for each dollar spent everywhere else; a $20 Nordstrom credit is earned for every 2,000 points accumulated, and extra points can be earned during special promotion times. This is a card to consider if you buy your luxury and/or expensive home items at department stores, as it's definitely the best department store card.

Bloomingdale's
Can be used: Only at Bloomingdale's
Credit score needed: Good
Interest rate: 24.5%
Things to know: You get three points for every dollar spent, with double points on cosmetics and fragrance; 5,000 points gets you a $25 Bloomie's gift card. While the threshold for rewards is high, you can rake in points if you buy your makeup, perfumes, and holiday gifts here. But since this card can only be used at Bloomingdale's, it's certainly only worth it for loyal (and frequent) customers.

Ann Taylor
Can be used: Anywhere MasterCard is accepted
Credit score needed: Good
Interest rate: 24.99%
Things to know: After the 15% off you get on your first Ann Taylor purchase made on the card, you earn five points for every dollar spent at Ann Taylor and Loft, plus one point for every dollar spent elsewhere. Once you amass 2,000 points, you get $20 in store credit. You also receive 10% off all Ann Taylor purchases made on the first Tuesday of every month, plus a $15 birthday coupon.

Target
Can be used: Only at Target
Credit score needed: Fair
Interest rate: 22.9%
Things to know: This card comes gets you a 5% discount on every Target purchase you make—and that discount can be combined with the deals you pull off CartWheel, Target's coupon app. Cardholders also get an extra 30 days to return items, plus free shipping for online purchases. This card is especially great for those who do their grocery shopping at Target, since it means 5% off lettuce, tissues, and so many more everyday expenses.

TJX
Can be used: Anywhere MasterCard is accepted
Credit score needed: Good
Interest rate: 26.99%
Things to know: You get 10% off your first TJX purchase when sign up for this card, and then earn five points for every dollar spent at TJ Maxx, Marshalls, and HomeGoods, as well as one point for each dollar spent everywhere else. A thousand points translates to a $10 TJX reward certificate, which is nice if you're an avid bargain hunter who frequents TJ Maxx and Marshalls. Just be careful: With its super high interest rate, this is not the card to leave extra balance on month to month.

Costco
Can be used: Anywhere American Express is accepted
Credit score needed: Excellent
Interest rate: 15.24% (but 0% for the first six months)
Things to know: This card comes with a free Costco membership and the cash back options are good: Get 3% back on gas station spending (capped at $4,000), 2% on restaurant spending, and 1% on all other categories. The catch is that you only earn cash back vouchers once a year, but it can translate to a nice, fat check if you log a lot of miles in your car.

Macy's
Can be used: Only at Macy's
Credit score needed: Fair
Interest rate: 24.5%
Things to know: This card is the gift that keeps on giving. Card members get 20% off their first Macy's purchase, and any items bought on the card can be returned without a receipt. There is no point system; cardholders are just constantly sent Star Rewards Passes, which can be worth $20, $30, or $50 (although there are exclusions: discounts usually can't be applied to designer items, beauty, or jewelry). Like the Nordstrom card, this is good if you make big home purchases at department stores.



Photo: Getty Images


The Worst

Victoria's Secret
Can be used: Only at Victoria's Secret
Credit score needed: Fair
Interest rate: 24.99%
Things to know: You earn one point for every dollar spent at VS, with double points for bras; 250 points get you a $10 reward, the value of a single pair of underwear. The card comes with other incentives, like early access to the brand's famed semi-annual sale and coupons for free underwear, but even non-cardholders get those. Unless you buy an insane amount of underthings, these perks are pretty lame. A general rule is this: Cards that can only be used at specific stores are only helpful if those stores are multi-category and are places you shop regularly.

Saks Fifth Avenue
Can be used: Only at Saks
Credit score needed: Good
Interest rate: 23.99%
Things to know: Besides getting 10% off your first Saks purchase, rewards are difficult to attain since the card's point system isn't great. One dollar equates to two points until you spend $4,999; after that, one dollar nets you four points until you reach $9,999, and then one dollar turns into six points. You earn a $25 credit for every 2,500 points, which only makes sense if you're a big shopper who drops all your money at Saks.

American Eagle
Can be used: Anywhere Visa is accepted
Credit score needed: Good
Interest rate: 23.99%
Things to know: Our problem with this card stems from its confusing rewards structure. You earn a single point for every $25 you spend at AE or $100 you spend elsewhere. Once you've reached 10 points, you get a $10 AE credit. You're better off signing up for the brand's free rewards program, where you earn a point for every dollar spent; points are totaled every three months, and 100 points gets you a 15% off coupon, 200 gets you 20%, and 500 gets you 40%.

J.Crew
Can be used: Only at J.Crew
Credit score needed: Good
Interest Rate: 24.99%
Things to know: While it's pretty easy to earn some rewards with this card— $25 credits for every $500 you spend—the rest of the benefits are mediocre at best. J.Crew offers card members early access to sales...which isn't a huge advantage considering the brand runs sales constantly. And while cardholders receive complimentary alterations, that perk can't be applied to sale items—and given those perpetual sales, most items you buy at J.Crew probably aren't full-priced anyway.