Store Credit Cards vs Regular Credit Cards
Credit cards are all the same. That’s what many believe. Whether the opinion is positive or negative, the truth is, credit cards are not all the same. There are traditional and non-traditional credit cards. They vary in what they offer, terms, interest rates, credit limits, and other factors. Which, then, is the best? The answer depends on what can best provide for one’s financial needs. It may be a traditional type of credit card with traditional benefits. Or it could be as non-traditional as an online shopping credit line for bad credit.
Traditional Credit Cards To find out what works best, one must first know how to differentiate credit card types. What are the common or traditional ones? American Express, Discover, Mastercard, Visa. All are well-known traditional types of credit cards called network cards. These major cards are accepted around the world. Not all retailers accept them, though.
Some networks set the fees but not the customer charges. It’s the issuers -- the banks and credit unions -- that decide on the charges. Regular credit cards can provide the following: ● ● ●
Protection in disputes over card-bought goods and services Extension of the original product warranty Coverage of items, whether damaged, lost or stolen
Store Credit Cards Store cards belong to a different type of credit cards. Retailers offer them to customers. To regular patrons especially. The offers come with promises of various promos, nice discounts, and special perks. Since they are online store credit cards guaranteed approval, card use is limited to the store that issued them. At times, the scope is even smaller, say, a part of the store.
A major advantage of store cards is they are easy to get. Applications get approved almost immediately. That’s regardless of one’s credit standing. Store cards are online shopping credit line for bad credit. Two Categories of Store Cards: Private-label retail cards - easily accessible to loyal shoppers with low credit Co-branded store credit cards - used like traditional cards with the retailers backed by major networks
Store Credit Cards vs Regular Credit Cards How similar are regular cards to store cards? What are their differences? Are there any options? 1. As mentioned, traditional credit cards are accepted by most retailers around the world. This acceptance makes shopping easier and provides options. A shopper can choose the merchant with the lowest prices. Meanwhile, online store credit cards guaranteed approval are only accepted at one merchant (any branch store). The lack of options limits the product selection and prices. Co-branded store credit cards are exempted, though.
2. The Annual Percentage Rates (APRs) for traditional cards are lower than that of store cards. General-use cards typically offer at least 29% APR as starting rate. Store cards typically has higher rates. 3. Store credit cards do not offer zero-interest periods. They offer deferred interest financing. The cardholder may only pay the minimum with no interest yet. But the interest will accrue. The cardholder might have a hard time paying everything due to backdated interest. It’s why payments should be completed before the promo period ends.
4. Retail cards have lower credit limits than general-purpose credit cards. 5. Cashback cards offer cashback options. Percentages vary. Store cards seldom offer this option. Compare credit cards first if considering cashback options. 6. Reward credit cards give reward points. These points may be used to purchase more available items in most locations. However, rewards are not used for direct shopping. Rather, they are redeemed from the merchandisers. There are only specific products available in the rewards system.
Rewards are cash back in the form of: ● ● ● ●
a check or statement credit points for merchandise gift certifications miles to offset travel expenses
With store credit cards, the rewards are not easy to earn. There are limited options for redemption. Store cards reward customers on purchase. Retailers offer promos, discounts, and perks. They are usually limited to members and used in stores.
7. Membership credit clubs are not credit cards or store cards. But they still are more like the latter. One must be a member to shop from a special catalog. It requires a membership fee. 8. It is easier to establish or rebuild credit history using a store card. Temporarily, at least. A retailer can provide an online shopping credit line for bad credit. Customers can have the opportunity to improve their credit scores. They have to use store cards wisely. Still, one should eventually open a major credit account to improve more on credit. Credit need not be a negative thing. That’s regardless of the type of credit card used. Whether it’s a traditional card or a store card, it can work. Simply avoid complications. Proper account management is the key.