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Store Credit Cards: The Advantages and Disadvantages

Feb. 21, 2020
2 mins
Closeup of a customer inserting their credit card into a payment device

Consumers have plenty of choices when it comes to credit cards, from travel, cash back, low balance transfer, and store credit cards, to name a few. Each has a variety of benefits and serves their audience differently.

So why choose a retailer’s credit card? Store credit cards can be a great way to earn discounts at your favourite stores and often have extra perks if you shop at the retailer often. For these reasons, they suit frequent shoppers the best. However, for many households, a store credit card might not be their primary credit card.

Advantages of Store Credit Cards

1. Low Fees

Many store credit cards come with no annual fees and useful welcome offers. That is why they can make a great secondary credit card and addition to your wallet.

For example, the President’s Choice Financial® Mastercard®, Triangle™ Mastercard®, and Walmart Mastercard®, have no annual fees and offer rewards from some of your favourite brands.

2. Retailer Discounts

Most retailers like to promote their credit cards as a great way to save money, and they usually deliver on that promise. Some may even offer $25 off your first purchase or something similar. After that, you may also receive discounts or earn double the reward points when you shop at specific stores. And, these cards aren’t exclusive to the brand featured, allowing members to earn rewards everywhere else they shop, typically at a lower point or cash back percentage.

While everyone loves saving money, make sure you don’t overindulge and go on a spending spree, even if it is your favourite store!

3. Membership Perks

Apart from general in-store or online discounts, many store credit cards offer membership perks. Cardholders may be able to return items without a receipt or take advantage of extended returns, attend members-only events, enjoy free shipping, or access financing and installment plan options.

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Disadvantages of Store Credit Cards

1. The Flexibility of Discounts and Rewards

Store credit cards generally offer the greatest rewards value when purchasing with the brand and allow customers to redeem points exclusively with the store or its partners. This can be great as a loyal customer, but other rewards cards typically offer more flexible redemption options such as travel or cash back and allow cardholders to earn points within more spending categories.

2. Low Credit Limits

If you’re looking for a high credit limit, you may have to look elsewhere. Store credit cards often have a lower credit limit than other credit cards. If you carry a balance, this can harm your credit score. For example, if your credit limit is $2,000 and you’re carrying a $2,000 balance, your credit utilization will be 100%, which is well above the recommended 30%.

However, if a large financial institution backs a store credit card, this may not be the case.

Do Your Research

Regardless of what type of credit card you’re looking for, it pays to shop around. You can compare and search for the best credit cards all in one place on


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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