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What Are In Store Credit Cards?

What Are In Store Credit Cards?

In-store credit cards are slightly different than more nationally recognized financial institution credit cards in that they normally have specific features or offers available to card holders. However, there are some drawbacks to in-store credit cards and once you understand their specific nature you may still decide to use your more traditional credit card to make purchases. This article will discuss some of the pros and cons about in-store credit cards which will help you evaluate whether or not it is something you want access to.


If you are a frequent shopper of a given organization such as Amazon.com or Sears then having their branded credit card may be beneficial. While not the same thing as a membership to a wholesale store, in-store credit cards often have benefits such as free shipping or special interest rates on purchases. Having an in-store credit card at a bare minimum will allow you access to special offers either via e-mail or a Twitter or Facebook feed. These special offers will also usually come with promotional interest rates on the product in question such as purchasing a new refrigerator for 0% interest if you use your in-store credit card. While the same stores often have promotional sales periodically, especially during the holidays, the idea is that if you are already an in-store credit card holder you're more likely to purchase a product from them than you are to shop around.


All is not sunshine and roses when it comes to in-store credit cards however. One of the major drawbacks is that if you are not making promotional purchases at 0% interest then it is more than likely that your purchases will be at a higher nominal interest rate than your average credit card. This can be a significant drawback if you make many purchases because as the balance increases the difference between the base rate on an in-store credit card and your standard everyday credit card could be as much is 10% to 15%. It is not unheard of for in-store credit cards to have interest rates as high as 23% where many national credit cards offered by financial institutions can be as low as 8.9%. That's a huge difference and if you carry a balance any of the benefits you get from using an in-store credit card could be negated within the first month of interest.


For the most part consumers use more traditional credit cards offered by nationally recognized financial institutions. This is based solely on the fact that the nominal interest rate is normally significantly lower than an in-store credit card. Any benefits derived from using an in-store credit card like special offers or 0% interest for a limited time usually do not offset the drawbacks. A higher average interesting alone is normally enough to convince consumers to use their day-to-day credit card to make most of their purchases. If anything, consumer should have one or two major in-store credit cards in a desk drawer should the opportunity present itself where it makes sense to take advantage of a promotional offer or interest rate. Just be careful when using your in-store credit card however because if you go past the promotional period you could find yourself paying hundreds of dollars in interest when you thought you were getting a great deal.

Image by: Steven Depolo