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How do store credit cards work?

Store cards are a type of credit card that are issued by a retailer and can only be used to make purchases in that particular store. 

As with standard credit cards, you can use a store card to pay for items upfront and then repay the balance at a later date. If you don’t repay your balance in full, you’ll be charged interest. 

Many retailers offer enticing store discounts in a bid to encourage you to sign up for their store card. For example, you might get 30% off your first purchase, and further discounts or loyalty points for later purchases. Other benefits could include invitations to special events in store or free online delivery.  

High street store cards

Store cards used to be offered by a wide range of high street retailers. More recently, however, a number of store cards have disappeared from the market. This has predominantly been a result of a declining high street, shops going out of business and many being taken over by e-retailers. The rise of buy now, pay later (BNPL) schemes has also contributed to the withdrawal of store cards. 

Some of the remaining store cards include:

: Benefits include a buy now pay later scheme, either over three, six or 12 months.The card has a representative APR of 34.9%.

Card benefits correct as of December 2024.

What is a store branded credit card?

A store branded credit card is simply a credit card associated with a particular store, for example John Lewis.

These cards can be used anywhere, and may offer better shopping incentives than traditional store cards.

What incentives could you get?

The benefits vary depending on the card you apply for. But examples include: 

• Money off your first purchase: This could be a set amount, or a percentage taken off your bill.

• Pay nothing back at first: Save on repayments for the first few months, then start paying back the balance with interest.

• Loyalty points: Build up points by spending, and exchange them for money off another purchase in the future.

How much do store cards cost?

Store cards charge the same fees as other types of credit cards, including:

• Interest on any outstanding balance left on the card

• Fees for late or missed payments

• Charges for exceeding your card limit.

Keep in mind that store cards may have higher interest rates than standard credit cards, meaning they can be a more expensive way to borrow. 

Find out more about how credit card charges work here

What are the pros and cons of store cards? 

If you’re considering applying for a store card, it’s important to weigh up the pros and cons first:

Pros:

• You may be able to take advantage of store discounts 

• Cards can offer other in store perks such as exclusive shopping events or early access to sales

• If you use your card sensibly, you may be able to build up your credit score

Cons:

• Store cards usually come with high interest rates 

• They can typically only be used in one store or in selected partner stores, such as Argos with Sainsbury’s

• Discounts and other perks could encourage you to spend more than you can afford to pay back

Should I get a store card?

Store cards can offer tempting discounts and, although you will usually still be credit checked, they can be easier to get hold of than standard credit cards. This can make them particularly attractive if you have a low credit score or even if you want to save money on purchases at your favourite retailer. 

However, before applying for a store card, it’s crucial to ensure you understand how it works and what charges could apply when. Aim to only ever spend what you can afford to pay back each month so that you don’t get hit with high interest charges. 

Is there a cheaper alternative to store credit cards?

If you are planning to make a large purchase, you could apply for a 0% purchase credit card. This type of card won’t charge interest on your spending for a set term, e.g. 0% on any purchases made in the first 12 months.You can use the card with any retailer online or on the high street. 

However, it’s important to calculate how much you’ll need to repay each month to clear your balance within the 0% period, otherwise interest will be charged.

Alternatively, if you are confident you can clear your balance each month, another option is a rewards credit card. These allow you to earn loyalty points or cashback whenever you spend. Interest rates are usually high so be sure to pay off your balance in full every month.