Credit Markets: 5 of the best store credit cards

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The only thing better than shopping is shopping for a deal. Some of our favorite stores to get lost in (hello, Target TGT, +5.88%  ) offer credit cards with even cooler in-store perks. It can be hard to say no to 20% off your first purchase or the promise of future member discounts. But not all store cards are created equal. Some perks aren’t worth the high APRs that come with the card or the temptation to spend money on unnecessary items.

You should make credit decisions carefully, understanding the effects of a hard inquiry on your credit report, as well as the APRs and other terms of any credit card you apply for. Still, store cards are some of the easiest credit cards to get, making them attractive if you’re trying to build or rebuild credit. In fact, many store credit cards are available for people with a fair credit score.

If you’re a big shopper, here are some of our favorite options to help you build credit and shop easy.

5 best store credit cards of 2020

Here’s a look at five 2020 contenders for the store credit card that might be best for your wallet.

Note: The information below about terms and offers was all current at the time of writing. You should always read the fine print before you apply for offers to make sure information hasn’t changed.

1. TargetRED Card

Everyone loves Target. It’s a common refrain among shoppers that you walk into Target for one item and come out with 20—a phenomenon known as “Target Syndrome.” If you find yourself regularly walking out with an armful of their signature red bullseye bags, you might want to consider the TargetRED card.

Target lets you apply for a credit or debit card, depending on your financial needs. Both offer 5% off your purchases at Target and and come with no annual fee. Cardholders also get perks like free two-day shipping, up to 30 days extra to return items and exclusive gifts and offers.

The only difference between the cards is that the TargetRED debit card connects to your own checking account. When you use it to make purchases, the money comes out of your checking account. The TargetRED credit card is a credit card. When you use it to make purchases, you pay with credit, which can create more flexibility at checkout. The APR is a little higher than average—it’s currently 24.9% —but if you pay off your card regularly, the perks and flexibility offered by the card may be worth it.

2. Kroger Rewards Card

Everyone’s gotta eat, right? If you shop at Kroger KR, +5.51%  , you can earn points using their reloadable prepaid Visa V, +5.82%   or Mastercard MA, +5.68%   Rewards cards. Those points, no matter where you shop, equate to free groceries at participating Kroger stores.

The Kroger Rewards card is basically a debit card, but it doesn’t draw directly from your checking account. Simply preload the card with your chosen amount from $10 to $5,000, then shop until it’s gone or until you drop—whichever comes first. Rinse and repeat. The great thing is that you can use this card anywhere Visa and Mastercard debit cards are accepted and still reap Kroger rewards.

It works like this:

Load the card with funds, then use the card to pay for things.

Earn 1 point per dollar for general spending, 2 points per dollar for spending at Kroger and 3 points per dollar for spending on Kroger brand items.

For every 1,000 points you earn, get a $5 coupon for groceries at participating Kroger stores.

Get 5 cents off per gallon at Kroger fuel pumps, always.

Because this is a prepaid card, there is no APR to worry about. There is no annual fee, but there is a $4.95 monthly maintenance fee if you have a balance on the card. There is also a cash reload fee of $3 if you reload at checkout rather than via direct deposit.

3. Kohl’s charge card

Kohl’s KSS, -1.81%   is one of the largest department store chains in the U.S.—Mary-Kate and Ashley have even allowed their Elizabeth and James brand to be sold exclusively in the store—and the Kohl’s Charge card is one of the most popular store credit cards for building credit. The store has many shopper rewards programs, and the Kohl’s Charge card is the obvious next step for regular Kohl’s shoppers.

Related: Kohl’s eliminates 250 positions as part of restructuring

With one of these cards, you’re entitled to extra savings offered throughout the year. These discounts are offered monthly—and they do expire, so you’ll need to keep track of them. You must use the Kohl’s card to take advantage of these discounts, and you can only use the card at Kohl’s and To sweeten up the pot, Kohl’s allows you to combine the dollar-off rewards from Kohl’s Cash and Yes2You Rewards with Kohl’s Charge discounts (though you cannot combine multiple percent-off discounts).

Also read: Bad shopping habits you’re going to have to break

There’s no annual fee, but the APR is a little steep (it’s currently 26.49%). If you shop at Kohl’s often enough to make a Kohl’s Charge card worth it, try to pay off your balance each month to avoid expensive interest fees. The one bummer about the Kohl’s Charge card is that there are no additional spending rewards beyond the monthly discounts. You’ll want to sign up for the free Yes2You Rewards program, which provides 1 point per dollar on Kohl’s purchases, and combine it with your use of the Kohl’s Charge card. Otherwise, wait for the monthly rewards and keep this card securely in your wallet when not in use.

4. Sam’s Club credit card

When you need to restock on toilet paper, where do you go? If you don’t go to Sam’s Club, you might be paying too much for your 24-pack of TP. Members of Sam’s Club warehouse store, however, might consider a credit card from the retailer to save even more money. You can apply for a Sam’s Club Mastercard that can be used anywhere Mastercard is accepted. The retailer also offers a Sam’s Club credit card that can only be used at Sam’s Club and Walmart WMT, +7.62%  .

The Sam’s Club credit card typically comes with a modest bonus offer than can easily be activated by regular Sam’s Club and Walmart shoppers. The Sam’s Club Mastercard offers more reward options, including various levels of cash back. There’s no annual fee beyond your regular Sam’s Club membership fee. That’s great news, but the variable APR is a little high, so if you use the card you’ll want to pay your balance off regularly to avoid high interest fees.

5. Gap credit card

Those who are more apt to shop for clothing than groceries might find a Gap GAP, +1.63%   credit card a better option for their wallet. Regular shoppers can sign up for a GapCard or a Gap Visa. You can use the GapCard at any of the Gap family of brands, including Old Navy, Banana Republic, and Athleta, while the Gap Visa can be swiped anywhere Visa is accepted.

Also on MarketWatch: Gap stock jumps on news it will not spin off Old Navy

The GapCard lets you rack up—pun intended—five points per dollar for shopping at affiliated stores and offers 10% off at Gap stores and online on every purchase. You also get points offers on your birthday and other special occasions. With the Gap Visa credit card, you also get a point for every dollar you spend outside of the Gap brands using the card. Every 500 points equals a $5 store credit.

Account holders who meet certain requirements can be upgraded to a Gap Silver or Gap Silver Visa card. When you reach this tier, you can choose your own sale day, get free online shopping and receive various other perks. Both cards come with no annual fee, but once again the APR is a little steep. As of this writing, the APR is 27.49% variable.

An option if you don’t want a store credit card

Not everyone is loyal to a single store—and we can’t say we blame you. There’s a lot of good shopping to do out there. But if you’re not going to shop at the store often, you may not build up enough rewards to make it worth holding the store’s card. That’s true no matter how awesome the perks seem when you first look at the offer.

If you don’t have a love affair with a certain store or find yourself shopping for groceries in the same place every week, consider a different type of rewards credit card. For example, the Capital One COF, +3.64%  SavorOne cash rewards credit card lets you earn cash back on a variety of purchases, including dining and eating out. And you don’t have to stick with the same retailer to get the rewards.

When used responsibility, credit cards can be a great financial tool. Before you apply, check your credit score so you have a better sense of what cards you might be approved for.

Note: It’s important to remember that interest rates, fees, and terms for credit cards, loans, and other financial products frequently change. As a result, rates, fees, and terms for credit cards, loans, and other financial products cited in these articles may have changed since the date of publication. Be sure to verify current rates, fees, and terms with credit card issuers, banks, or other financial institutions directly.

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