At a Glance

Retail cards are a type of credit card issued by retail stores that can only be used at that retailer. These cards, called closed-loop retail cards, work similarly to traditional credit cards and often have rewards programs that encourage you to make purchases from that retailer, such as points for discounts, but can only be used at the retailers they are connected to.

Other retailers offer co-branded Visa or American Express cards that can be used like a regular credit card, but you still earn rewards toward the partnering retailer. These are called open-loop retail cards.

Store credit cards can impact your credit score both positively and negatively depending on how you use them, and they come with both pros and cons that should be weighed carefully.

In this article, you’ll learn:

How do store credit cards affect your credit?

Retail credit cards affect your credit in the same way a traditional credit card would, and it all depends on how you use and manage it.

For example, if you have poor credit or lack of credit history, a retail card may be helpful to build your credit. Store cards typically have less strict approval criteria, so they might be easier to qualify for. Then, if you use your card for smaller purchases (keeping your credit utilization down) and pay it off on time and in full each month, your score may improve.

A store card can also add to your credit mix, which can help show you’re a responsible borrower who can manage a variety of credit accounts.

Even if you already have good credit, using the card responsibly can still help increase your credit score.

That said, when you first apply for the retail card, it will trigger a hard credit inquiry on your credit report, which can slightly decrease your score for a short period of time. Having credit utilization above 30% (meaning the amount of credit card debt you have compared to your overall credit limit) and missing payments can negatively affect your score as well.

Additionally, a new credit card can reduce the average age of your credit accounts, and depending on what other accounts you have and the age of those, your score could potentially decrease.

Another way a score credit card can affect your credit is if you close it. Closing a credit card can reduce your total credit limit and potentially increase your credit utilization ratio. It can also negatively affect your credit history.

  • Payment history makes up 35% of your FICO score.
  • Credit utilization makes up 30% of your FICO score.
  • Length of credit history makes up 15% of your FICO score.
  • Credit mix makes up 10% of your FICO score.
  • Hard inquiry could lower your credit score by an average of 5 to 10 points.

Credit needed for a store credit card

You may be able to get a store credit card with fair credit (640 or higher).

Because retailers know you shop at their store, they have a greater incentive to give you a card to encourage you to shop and spend more money. Therefore, these cards typically don’t have as strict requirements to be approved and are often easier to get than traditional credit cards.

However, store credit cards do usually have higher APRs and lower credit limits, which can increase the risk of the cardholder using too much of their credit.

Pros and cons of store credit cards

Pros Cons
  • Earn rewards, get discounts or offers, and other promotions for the retail establishment.
  • Lower credit limits.
  • Less strict application requirements.
  • Easy to overspend.
  • Can help build or improve credit (if used responsibly).
  • High APR.
  • Many have 0% promotional APR.
  • Only good at one store or retail chain (limited usability).
  • Can improve the credit utilization ratio.
  • Less robust security alerts.
  • Diversifies credit mix.
  • Expensive fees.
  • Terms can be confusing.

Is a store credit card right for you?

If you regularly shop at a specific retailer, you may want to consider a store credit card. They are relatively easy to get approved for and are a great way to rebuild bad credit or build a credit history for the first time (as long as you make your payments and keep utilization low).

And, these cards typically come with rewards, promotions, discounts, and other incentives that you can put toward purchases with the retailer.However, if you have good or excellent credit, there are traditional credit cards that may offer similar or better rewards and have more flexibility, lower interest, and fewer fees.

Compare: Best Store Credit Cards

When considering a store credit card:

  • Do your research and choose carefully so that you only have one temporary hard inquiry hit. Applying for several cards at the same time can affect your score more. Make sure you understand the payment terms, promotions, fees, and other restrictions or fine print.Additionally, try to avoid making an impulse decision at the checkout when they ask if you’d like to apply. If you think you’re interested, take the information but think about it before making a decision.
  • Monitor your spending. Store credit cards often have lower credit limits than traditional credit cards, so it’s easier to carry a high balance (even unintentionally). Make sure you’re paying attention to your credit utilization and try to keep balances low.
  • Know the due dates and make sure you make your payments on time and if possible, in full each month. Missing payments can not only lead to late fees but it can also significantly affect your credit score.
  • Have a plan to avoid overspending. Using a store card to shop, especially if you earn rewards by using the card, can make it easy to buy things you don’t need. Make sure any offers, coupons, discounts, rewards, and other promotions are worth what you’ll spend.
  • Try to pay off the card every month. Store cards have higher APRs so you’ll likely accrue much more interest if you keep a balance from month to month. Try to pay your card off in full so that you don’t accrue interest.


Even if you have poor or no credit, you may qualify for a retailer credit card. Using the card responsibly may help you to improve or build credit, improving your credit score.

Yes, store credit cards are easier to get. Retailers want you to continue spending money at their locations, so they tend to have less strict requirements for approval. However, the APRs are much higher than traditional cards so have a plan to avoid overspending.

Yes, closing any credit card will impact your credit score because it lowers the overall amount of credit you have access to, increasing your credit utilization. It can also impact your credit history.