Finances (US)

What is a store card? A complete guide on how to use it

What is a store card? Does it work like a traditional credit card? What are the differences? Learn all about it on this complete guide on how to use it.

Store card: learn what it is and how it works

A store card can bring you many benefits: learn how to use one. Source: The Mister Finance.
A store card can bring you many benefits: learn how to use one. Source: The Mister Finance.

Do you know what a store card is? If not, you should, especially if you are a frequent client at a typical store like a retailer.

Store cards are not new additions to the market, and many use them because they seem to offer better conditions for purchases.

However, that is not always true. No matter if you hold a store card or a traditional credit card, you must be in control of your debt if you don’t want to sink into further debt.

But which card is the cheapest? And which card offers the best features?

Then, continue reading this complete guide to learning how a store card works and how to choose the best for you.

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What is a store card?

Firstly, a store card is like a credit card, but it can only be used in a determined group of stores or chains.

Nowadays, many store cards allow you to use them outside of the chain or the store. Thus, you can use them just like another traditional credit card.

But they usually offer something extra when you purchase at the store that issued the card.

For example, imagine a store card from an online store. It will give you amazing rewards for you to buy on the store. You can still use the card outside the store, but you won’t earn the higher rewards tier.

Regularly, store cards come with a membership fee. On the other hand, you may be able to find cards that don’t charge fees at all.

Of course, you need to consider whether you want to become a store client or not. Actually, this is the first point you must take into consideration before applying for a store card.

On the other hand, if you find a cheap but valuable card, it might be worth considering becoming a client to accumulate rewards and get good discounts.

How does a store card work?

Enjoy discounts and exclusive offers with a store card. Source: Canva.
Enjoy discounts and exclusive offers with a store card. Source: Canva.

Store cards work just like credit cards. That is, you borrow an amount of money from an institution the moment you make a purchase. Then, you must pay the institution back according to the terms and conditions signed when you applied for the card.

Usually, a card billing cycle takes from 27 to 31 days. If you don’t pay the bill on time, interest will apply. 

In fact, that’s what happens the most worldwide. People sink into debt because they cannot pay the debt accumulated in a store or credit card.

Unlike a credit card, though, it is much easier to be approved when applying for one.

Traditionally, the best credit cards available on the market request several eligibility requirements. 

On the contrary, store cards offer much easier application processes. So, many people rely on that to get a card that works just like any other credit card.

But does it work exactly like a credit card? Take a look at the differences below.

Differences between a store card and a credit card

In general, store cards work like credit cards. However, they have some particularities you may enjoy learning before deciding to choose the best for you.

To sum up, a store card usually allows its cardholder to use the card in a specific store. A credit card, on the other hand, can be used wherever you are in the world.

1. Store cards can be used in specific stores

Traditionally, store cards can only be used in a specific store or chain of stores. Nowadays, some store cards allow clients to use them wherever a Mastercard or Visa is accepted. 

But, it is not all cards that do it.

In fact, most of them don’t allow you to use it outside of a specific store, unfortunately.  

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2. Store cards have membership fees

Also, most store cards charge membership fees. Although you may be able to find cheap store cards, they usually charge higher fees and higher interest than traditional credit cards.

So, it is really important to make sure you will be able to earn more with a card before applying for one. Otherwise, a credit card is better!

3. It is easier to get a card

Certainly, getting a great credit card requires many requirements, especially when it comes to creditworthiness. Most credit cards require good credit scores, indeed.

On the other hand, it is much easier to be approved when applying for a store card.

Therefore, many people rely on that to be able to hold a card that works just like a credit card.

But you must watch out for the fees and rates. Additionally, make sure you frequently purchase at the store that issues the card.

Advantages and disadvantages of having a store card

Store cards are better for specific situations. Source: Canva.
Store cards are better for specific situations. Source: Canva.

Store cards have advantages and disadvantages. So, it is crucial to balance the pros and cons before deciding to get one.

Advantages

  • It offers discounts and good rewards at your favorite store;
  • Most don’t charge an annual fee;
  • It is easier to apply and be approved;
  • If you use it responsibly, you will be able to build your credit score.

Disadvantages

  • Most charge membership fees;
  • Many can only be used in a specific store;
  • Usually, fees and interest are higher than rates charged on traditional credit cards.

Recommendation: How to choose the best credit card to travel

So, now you know what a store card is, you are able to decide whether to apply for one or not. 

However, if you want a traditional credit card, especially if you are a frequent traveler, read the following article to find out more about the best cards available for those who want to travel abroad with rewards, protection, and convenience. 

Best credit cards for travelers 2023

How to choose the best credit card to travel?

Do you know how to choose the best credit card to travel to? Follow the right tips to look for a card that gives you all on your next destination!

About the author  /  Aline Augusto

My name is Aline Mesquita; I'm a writer here on the blog, where I write about finance in general and other subjects. I have been working with content creation for ten years. Also, I'm post-graduated in Project Management, with expertise in SEO practices. Currently, I am studying finance, market trends, and cryptocurrencies.

Reviewed by  /  Aline Barbosa

Senior Editor

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