Store vs. cash-back credit cards: Which one should I get?
Editor’s note: This is a recurring post, regularly updated with new information and offers. We’ve all been there. You’re checking out after a big purchase or a full day of shopping, and the cashier tells you how much money you’ll save by applying for a store credit card. Sometimes, it’s a tempting offer — after …
Editor’s note: This is a recurring post, regularly updated with new information and offers.
We’ve all been there. You’re checking out after a big purchase or a full day of shopping, and the cashier tells you how much money you’ll save by applying for a store credit card.
Sometimes, it’s a tempting offer — after all, who doesn’t want to save money? But while the potential for immediate savings is real, store credit cards usually aren’t your best option when it comes to earning high-value credit card rewards.
On the other hand, though, there are some store cards that make sense for certain shoppers. Let’s examine a couple of popular store cards and how they stack up against four of our favorite cash-back credit cards.
Related: Are cash-back credit cards worth it?
What is a store credit card?
A store credit card is offered by a specific retailer. Many are closed-loop cards, meaning you can only use them in that specific store, but we’re going to focus on open-loop store cards vs. cash back cards.
Open-loop cards have a store brand in their name, but you can use them anywhere you would use any other credit card. For example, the Navyist Rewards Mastercard® is Old Navy’s store card. As an open-loop card, though, cardholders can use it anywhere Mastercard is accepted, including places like restaurants and gas stations.
Even though you can use these cards like most other credit cards, some of them limit your rewards to their specific store only. Before you apply for a store credit card, consider how much it will benefit you in the long run.
The information for the Navyist Rewards Mastercard has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Related: The best store credit cards
Should I get the Sephora Visa Credit Card?
The Sephora Visa Signature® Credit Card is appealing for two reasons: It offers a 25% discount on your first purchase within 30 days of account opening and earns the highest bonus on Sephora purchases of any card available.
If you spend a lot of money at Sephora, this may seem like a worthwhile card to have. However, most Sephora customers are still better off with a cash-back card, like the Capital One Savor Cash Rewards Credit Card. Here’s a closer look at what the two cards offer:
| Sephora Visa Signature Credit Card | Capital One Savor Cash Rewards | |
| Welcome bonus | Earn 25% off your first card purchase at Sephora within the first 30 days of account opening. Plus, earn a $20 Sephora reward after spending $500 outside Sephora in the first 90 days of account opening. | Earn a one-time $200 cash bonus after spending $500 in purchases within the first three months of account opening. |
| Annual fee | $0 | $0 |
| Earning |
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| Rewards redemption | Receive Sephora Rewards certificates in $5 increments |
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Verdict: If you spend the majority of your budget at Sephora, then the Sephora store card might be worth it. Otherwise, you’re much better off getting the Savor and using its larger welcome bonus and higher cash-back earning rate on bonus categories to help cover your Sephora splurges.
To learn more, read our full reviews of the Capital One Savor and Sephora Visa.
The information for the Sephora Visa Signature Credit Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Learn more: Capital One Savor Cash Rewards Credit Card
Should I get the Apple Card?
The Apple Card can seem like an obvious choice if you’re about to make a large Apple purchase. But while it will earn you bonus rewards on your big purchase, it isn’t necessarily the best credit card for Apple purchases.
Let’s check out how it compares to the Blue Cash Everyday® Card from American Express:
| Apple Card | Blue Cash Everyday Card from American Express | |
| Welcome offer | No welcome offer | Earn $200 cash back as a statement credit after spending $2,000 on your new card in the first six months of cardmembership. |
| Annual fee | $0 | $0 (see rates and fees) |
| Earning |
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| Rewards redemption | Rewards are applied to your account as Daily Cash; you can use it directly by paying with your card through Apple Pay or receive it as a statement credit | Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout |
Verdict: If a major Apple purchase prompts you to consider the Apple Card, you’re better off getting the Amex Blue Cash Everyday card. With it, you can purchase your Apple product online and earn 3% cash back.
Plus, your purchase can help you reach the spending requirement to earn the welcome bonus on your card, earning you even more with your purchase. And you’ll have peace of mind knowing that your new item is protected against accidental damage or theft by American Express purchase protection*, which the Apple Card doesn’t offer.
If you use Apple Pay frequently or need to finance an Apple purchase, the Apple Card may be worth considering. However, if you do most of your shopping online, earning 3% back on your Apple purchases with the Blue Cash Everyday card is your better option.
To learn more, read our full reviews of the Amex Blue Cash Everyday Card and the Apple Card.
The information for the Apple Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
*Eligibility and benefit levels vary by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company.
Apply here: Blue Cash Everyday Card from American Express
Should I get the Prime Visa card?
If you’re a loyal Amazon shopper, you’ve almost certainly been tempted by the savings Amazon promises with the Prime Visa during checkout.
The Prime Visa is a good card — in some cases. But here’s how it stacks up against the popular Chase Freedom Flex®:
| Prime Visa | Chase Freedom Flex | |
| Welcome bonus | Receive a $100 Amazon gift card instantly upon approval, exclusively for Prime members. | Earn $200 cash back after spending $500 on purchases in the first three months from account opening. |
| Annual fee | $0, but Prime membership ($139 annually) is required | $0 |
| Earning |
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| Rewards redemption | Redeem for eligible purchases at Amazon.com or through Chase for cash back, gift cards or travel | Redeem for cash, gift cards or to pay for purchases with select retailers or for travel |
Verdict: The Prime Visa is an excellent option if you spend a significant portion of your budget at Amazon and Whole Foods and want the simplest path to earning 5% on your spending.
However, if you spend enough to maximize the Freedom Flex’s 5% categories and dine out often, you’ll benefit from its higher welcome bonus and dining earnings enough to make it your better option.
To learn more, check out our full reviews of the Freedom Flex and Prime Visa.
Apply here: Chase Freedom Flex
Apply here: Prime Visa
Should I get the Costco Card?
If you’re a Costco member, you probably spend plenty of money there and want to ensure you’re earning rewards on that spending.
When it comes to earning credit card rewards, Costco has the added complication of only accepting cards in the Visa network, so you might miss out on some earnings if your favorite card is part of a different network.
The Costco Anywhere Visa® Card by Citi (see rates and fees) is one of our favorite store cards, but that doesn’t mean it’s the best choice for everyone. Let’s compare it to a worthy alternative in the Wells Fargo Active Cash® Card (see rates and fees):
| Costco Anywhere Visa | Wells Fargo Active Cash Card | |
| Welcome bonus | None | Earn a $200 cash rewards bonus after spending $500 in purchases in the first three months. |
| Annual fee | $0, but a Costco membership is required ($65 annually for Business and Gold Star memberships; $130 annually for an Executive membership) | $0 |
| Earning |
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| Rewards redemption | Rewards are issued annually after your February billing statement closes. You will receive a credit card reward certificate that you can redeem at Costco for merchandise or cash back. | Redeem to offset eligible purchases, as a statement credit or deposit to a checking account, for cash at a Wells Fargo ATM, gift cards or through PayPal |
Verdict: It’s worth noting that both cards earn 2% on Costco purchases. Beyond that, if you spend most of your money on gas, restaurants and travel, the Costco Anywhere Visa has an earning structure that will benefit you most.
However, if you regularly make purchases outside of those categories, you’ll get more rewards from the consistent 2% earnings on Active Cash. Plus, its $200 cash rewards welcome bonus is a nice additional perk.
If you don’t spend frequently at Costco and lack a Costco membership, the Active Cash makes more sense.
To learn more, read our full reviews of the Costco Anywhere Visa and Wells Fargo Active Cash cards.
Apply here: Costco Anywhere Visa Card by Citi
Apply here: Wells Fargo Active Cash Card
Other ways to save at your favorite stores
Having a card that earns extra rewards at your favorite stores isn’t the only way to earn on your spending there. Here are some of our other favorite ways to save regardless of where we shop.
Use a shopping portal
Always use a shopping portal when you shop online. Sites like Rakuten allow you to earn additional cash back or rewards points on many store purchases.
These rewards will stack on top of any credit card offers and bonus category rewards you earn, so take advantage of them.
Check your merchant offers
Check the merchant offers on all your cards regularly, and add any you think you might use. We recommend using a note on your phone to keep track of which offers are on which cards; this way, you can easily reference them when you’re ready to make a purchase.
Bottom line
We generally recommend skipping the store credit card and applying for a rewards card with a better welcome bonus and earning structure. However, some store cards — like the Costco one — are exceptions.
Regardless, treat a store credit card decision like any other major financial decision, and do your research rather than falling for a tempting offer at the cash register. No matter where you land, you’ll feel good knowing you’re earning solid rewards on your spending.
Related: Cash back vs. travel rewards
For rates and fees of the Amex Blue Cash Everyday, click here.
For Capital One products listed on this page, some of the benefits may be provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.
