Store cards

[Anonymous]

Besides boosting available credit limit, and therefore lowering your total utilization - what uses do store cards have?

I'm not taking about store credit cards linked to a network (Visa, MC) but pure store cards that only work at the store. I understand if you're totally devoted to the store, spend thousands already at their stores you may enjoy the rewards, and that they may have lower UW criteria thus helping you rebuild, but otherwise, why not reap the rewards with a card that could earn better rewards? (PS: I'm a big fan of keeping it simple with only 3-4 cards I'll regularly use)

Also are the store 'debit' cards any good? For example the Nordstrom Debit/Target Debit - you want to reap the rewards but don't want to open a store cc and get an HP, have a reporting account

[Anonymous]

The only real advantage I can see with store cards are 0% financing offers. Handy if you're going to make a large purchase. Otherwise I steer clear. I don't tend to buy things with credit cards that I don't already have the cash for. There are a lot better cards out there for earning points/miles.

[dragontears]

In my opinion, the only reason to have a store card is if it is a place you shop at and it offers good discount/coupons or special financing. Otherwise you will be wasting money by buying stuff you normally wouldn't just to keep it active

[Royalbacon]

My 2 favorite store cards

Kohls - I shop there a lot and the coupons you get from having the card save you a lot money.

Target - 5% off everything in store immediately at checkout. No brainer. I live in a suburb of Minneapolis (Target started in the Minneapolis/St Paul area) and they still outnumber Walmart by a decent amount in the Minneapolis/St Paul area (Though Walmart has recently opened more stores in the past few years, they still got quite a ways to go to catch up to Target) So I do a lot of shopping at Target. Outside of the MPLS/St Paul area in rural Minnesota Walmart easily outnumbers Target though.

With Kohls and Target (or any store card for that matter, or credit card in general) always pay in full, or else the interest will cancel out any money you save from using the card.

As far as the debit card for Target, it takes a few business days for it to withdraw the money from your checking account. I'd rather have the credit card so it reports to the credit bureaus and helps your credit. Plus in the event of a data breach, i'd much rather have to deal with fraudulent purchases on a credit card then a debit card (which is linked to your checking account and could potentially give the thieves access to your cash)

[creditguy]

The best part of having a store card is, When they ask you at the register if you would like to apply for their card you tell them you already have it and they will leave you alone. Of course saying "No Thank You" works too I guess, . The only real reason to have a store card is like Dragontears said, Special financing and promos for cardholders. I have a seven year old that changes sizes monthly it seems and Kohls is right down the street and offers lots of discounts for using their card so it works for me, other than that most reward structured non store cards would be the better option. 

[austinguy907]

If you like to leverage your money then thinking big is the 0% factor on purchases.  

If you're rebuilding and need something to boost your potential new limtis then having a high limit can possibly influence your new lender decision by showing you're not maxing out your 25K xyz store limit.

Debit offerings are something new and not quite sure why they're doing this since if you have a bank account w/ a debit card why would you want to setup a 3rd party card to link to your checking account to get a small discount?  Seems like more of a liability linking your cash account to this type of setup.

Thinking big though would be some of the sky high limits for a remodel like Home Depot and Lowe's if you need tons of matierials to do something and can get 6/12/18/24/48 month terms on while working through the project.  Ideally after the project is complete it's PIF or transfered into a HELOC or another card through checks.

Otherwise it's not worthwhile to get a store only card unless there's a chance it can convert to V/MC and carryover the same benefits as the store card.

[Anonymous]

My personal opinion is that large store cards with large limits can be good. For example a person buying a new house or moving, the Lowes and Amazon cards with high limits can fabricate a whole house at 0% APR while taking the burden off of your "cash anywhere" cards leaving them empty.  Little cards at little stores to me not worth having unless needed for starting out then just get a couple, or you are a shopping fanatic at that store and they offer large discounts with their card like Kohls for example.

[Anonymous]

RoyalBacon - I live in Fridley not too far from the cities

I also prefer using both Kohls and Target cards for the same reasons. They may not give huge CLI'a but the coupons and discounts make it worth my while. There's a lot of SuperTargets out here in MN so you can shop for mostly anything.

[SouthJamaica]

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@Anonymous wrote:

Besides boosting available credit limit, and therefore lowering your total utilization - what uses do store cards have?

I'm not taking about store credit cards linked to a network (Visa, MC) but pure store cards that only work at the store. I understand if you're totally devoted to the store, spend thousands already at their stores you may enjoy the rewards, and that they may have lower UW criteria thus helping you rebuild, but otherwise, why not reap the rewards with a card that could earn better rewards? (PS: I'm a big fan of keeping it simple with only 3-4 cards I'll regularly use)

Also are the store 'debit' cards any good? For example the Nordstrom Debit/Target Debit - you want to reap the rewards but don't want to open a store cc and get an HP, have a reporting account

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I personally stay away from store cards.

[accidentalpancake]

0% financing, as others have said, is the primary draw for those who have no problem getting prime cards.

Another benefit, which is dubious to me, but somewhat valid, is the value of rewards earned by certain stores (most clothing retailers, for example).

Let's use Banana Republic, since it's a card I've had for many years. My family shops there for clothes, independent of having the card. It's a place we would shop with no card (and do, most of the time). The card accumulates points that turn into "cash" certificates for future shopping. If we exclusively used the card for clothing purchases, which we have done in years past, we would end up with upwards of $100 annually in rewards, which in turn gets us "free" merchandise. 

The problem with this scenario is that we're being enticed by a currency that is only good for redemption at this particular retailer. Sure, we can justify it by saying that we shop there anyway, but in reality it causes people to buy things they otherwise wouldn't. There's always a point at which you're going to look at your rewards balance and realize that you have to go buy something or your certificate will expire, when you had no intention or need to buy anything at that moment. Brilliant, whoever came up with the whole scheme.

I'd much rather put my purchases on a card that generates rewards that I will use for offsetting the costs of other things, like travel. If I'm going to spend $1000 on clothing in a year, why not make that money work for me by lowering the cost of a vacation, rather than giving me rewards so that I end up with $1150 worth of clothing (of which I've now spent an actual $1050, not $1000, since reward redemption almost always causes you to spend a little out of pocket)?