Bank like a financial pro with the Alliant mobile app. Make payments, deposit checks, manage cards and so much more.
Renovate your kitchen, pay off high-interest debt, or have access to emergency funds when you need it with an Alliant Home Equity Line of Credit.
Browse new and used vehicle inventory, and qualify for a rate discount when you buy!81
Separate each of your savings goals into an Alliant Supplemental Savings Account so you can visualize your progress.
By Maggie Tomasek
Credit card offers are so pervasive that it’s hard to avoid them – even when you’re just out running errands. A large number of U.S. retailers offer their own card, but are they worth it? We explore the pros and cons of store credit cards to help you choose the right one.
It seems like every time I go shopping, at least one cashier asks me to apply for their retail credit card right there in the checkout line. Although this process is usually quick and easy, it’s also important to note that applying for a store credit card likely will come with a hard credit inquiry, which could impact your credit score. You can also apply for most retail cards online or by mail.
Just like with regular credit cards, sometimes you can find out immediately whether you’ve been approved or denied for the card, or it could take a few days for the card issuer to review your application.
Retailers often entice shoppers with extra savings on same-day purchases through offering store credit cards, especially around the holiday shopping season.
In addition to sign-up incentives, some retail cards may offer ongoing discounts whenever you shop to reward you for your loyalty. For example, the Target REDCard offers 5 percent cash back on in-store and online purchases, the Gap Visa card gives you five points per dollar spent on all their brands, and the Amazon Prime Store Card gives you 5 percent cash back on Amazon.com purchases. If you’re a frequent shopper at your retailer of choice, those rewards can really add up.
Also, people with lower credit scores often can more easily qualify for store credit cards. When used responsibly – by paying off your full balance each month and always paying your bills on time – retail cards can be a great way to improve your credit score.
The interest rates on many of these store credit cards can end up costing consumers in the end. Cards issued by retailers typically carry much higher interest rates and fees than regular credit cards. In fact, according to CreditCards.com’s 2020 Retail Store Card survey, the average APR for retail cards is 24.35 percent, about five percentage points higher than regular credit cards.
Store credit cards usually come with low credit limits as well. That might not be an issue for you, depending on the store, but it’s definitely something to consider. A low credit limit could affect your credit utilization rate, one of the key factors in determining your credit score.
The perks that come with a store credit card are often not that great, especially when compared to other rewards credit cards out there. For example, if you’re only earning 1 percent cash back on purchases at that retailer, you would be better off using a credit card that allows you to earn higher rewards on purchases everywhere, like the Alliant Cashback Visa Signature card.
Also, watch out for deferred interest promotions. These are payment plans that offer to delay payment of interest, often advertised as “no interest until” a specific date. However, after that date, the interest that has been accruing since the purchase date is charged to the account. If you’re making a large purchase, such as new kitchen appliances or furniture, rather than using the retailer’s risky deferred interest card offer, find a credit card with a 0% intro APR, like the Alliant Visa Platinum card.
Maggie Tomasek is the PR & Content Strategist at Alliant. She began her career as a journalist for newspapers in Utica, N.Y., Des Moines and Cincinnati before moving to Chicago in 2009. Maggie is an eight-time Chicago Marathon finisher and a lifelong creative writer with a passion for comedy. Her mom instilled in her a great sense of fiscal responsibility, and her big sister told her to throw that responsibility out the window every once in a while in the name of life experience. So far, that combination of financial advice has worked out pretty well for her.
Get even more personal finance info, tips and tricks delivered right to your inbox each month.
Thanks for subscribing to Alliant's Money Mentor newsletter! You will now receive personal finance tips in your email inbox each month.
You are leaving Alliant’s website to enter a website hosted by an organization separate from Alliant Credit Union. The products and services on this website are being offered through LPL Financial or its affiliates, which are separate entities from, and not affiliates of, Alliant Credit Union.The privacy and security policies of the site may differ from those of Alliant Credit Union.
You are leaving an Alliant Credit Union website and are about to enter a website operated by a third-party, independent from Alliant Credit Union. Alliant Credit Union does not manage the operation or content of the website you are about to enter. Alliant Credit Union is not responsible for the content and does not provide any products or services at this third-party website. The privacy and security policies of the site may differ from those of Alliant Credit Union.