Shopping Credit Cards Explained

Updated: Jul 4, 2024

Advertiser Disclosure

Guide to Merchandise Store Credit and Shopping Cards Explained. How to Shop While Building Credit and Reap Store Rewards With By Now – Pay Later Offers

The first thing you should know about shopping credit cards is that they are delicate, and you need to use them carefully. If you have discipline and strategy in mind, they can help you get amazing deals, and rewards, and help build your credit score. If not, you can easily get into a loop with constant interests. This is particularly important because shopping cards usually have higher interest rates. So let’s see what cards for shopping have to offer and how you can use them to your advantage.

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How do shopping credit cards work?

  • A shopping credit card is similar to a general-purpose credit card, but it can only be used in a certain retail store or chain.
  • Like with other credit cards, it allows you to buy products through a credit that you can pay off each month.
  • If you don’t repay your balance in full, you will have to pay interest.
  • They come with higher interest rates.
  • You might get offered one at the store or apply for it online.
  • Shopping credit cards offer discounts, vouchers, gifts, and so on.
  • A person needs to be 18 years old to hold a shopping credit card.

Don’t confuse shopping cards with co-branded cards

Shopping credit cards are similar to many other credit cards, but they aren’t the same. This means that you can easily mix them up and make costly mistakes. Many people confuse shopping credit cards with co-branded cards, and we can’t blame them. A lot of providers and card issuers call their co-branded cards shopping credit cards. In a way, they are, but not entirely. These cards are basically a mixture of general-purpose cards and shopping cards. Simply put, these cards have the name of a card issuer as well the store brand on them.

This is because they can be used both in their store but also pretty much everywhere else where financial institutions behind the card (Visa, Mastercard) allow it to be used. At the same time, they offer some benefits when using them at certain retail stores. However, “real” shopping cards are the ones that can only be used in designated stores and nowhere else. Other commonly used names of shopping cards used are merchandise credit cards or store cards.

Shopping credit cards have the name of the retail brand only without a financial institution.

Shopping credit cards are unsecured cards

If you read our “Credit Card Essentials You Need to Know” you might have already guessed that shopping cards fit into the unsecured category. However, this doesn’t mean that they pose any risk to cardholders if they use them properly. They don’t require any money to be put down when getting them. In most cases, unsecured credit cards have lower interest than their counterparts. Like shopping cards, most unsecured options offer various rewards.

On the other hand, secured cards don’t come with rewards. However, most unsecured cards require extensive credit score checks by the issuers, but shopping cards are unique because they have an instant decision and don’t come with any major checks.

Even though merchandise credit card offers come for free doesn’t mean that they don’t cost you anything in the long run.

How is shopping credit card interest calculated?

With increased financial flexibility and reward programs, shopping cards can offer a lot to consumers. However, you need to know how the interest of your card works to be able to get the most out of the benefits your card provides. In a perfect world, nobody ever misses their monthly payments nor carries a balance on their credit cards. But in reality, a lot of people are often forced to carry over a balance from one month to another. What’s the issue with having a balance, you ask? Usually, it comes down to APR.

Defining interest and APR of shopping credit cards

All shopping card offers come with interest rates. There simply needs to be a way for cardholders to pay for borrowing the money essentially. Simply put, the interest rate represents a fee you have to pay for using money that doesn’t belong to you. For most credit cards, including shopping, the interest rate is usually expressed on a yearly basis. This is done through the APR or the annual percentage rate. Even though the APR serves as an annual rate, all credit companies will use it to determine the interest they charge on a monthly basis.

7 Types of APR

When getting your store credit card, you need to inspect various details so that you know how much you will have to pay for your fees in case of negligence. Some cards have variable APR while some have fixed APR:

  • Variable APR: Cards with variable APR usually have a prime rate to start off, and then they add margins. The APR changes along with the prime rate and results in the final variable.
  • Fixed APR: Cards with fixed APR usually don’t change. However, in some circumstances, they can be adjusted. For example, if the cardholder is more than 2 months late with payments, it can change. Some cards have an introductory fixed APR which changes after some time.

These are the two most general types of APR, but there are 5 others you should be aware of:

  1. Penalty APR. This APR includes charged interest for late payments or in case the user violates some terms and conditions of the card. This is one of the most rigorous APRs, and it’s usually imposed when the payments have been late for over 60 days.
  2. Introductory APR. This is a limited-time APR that is designed as a promotion to help attract users. This APR usually applies to balance transfers or purchases for a limited amount of time. In some cases, it can be both. This APR is always lower than the regular one that comes after. Sometimes, the introductory APR is set at 0%.
  3. Cash Advance APR. The cash advance APR applies an interest rate on the amount the user borrows from their credit card. The interest is typically higher and doesn’t come with a grace period. Simply put, when you get a cash advance through your card, you will instantly start paying interest after the transaction.
  4. Balance Transfer APR. When using balance transfer cards to transfer an amount from one card to another, the amount transferred usually comes with interest.
  5. Purchase APR. The purchase APR involves interest applied to every purchase that has been made through the credit card.

Available Shopping Credit Cards

Store CreditCredit LimitsCredit ReportingAPREasy to get
No Fee Credit Catalogue Card$5,000No0%Yes
Unique Platinum$1,000No0%Yes
Perpay Credit$5,000Yes, 3 Bureaus0%Yes
Unique Platinum$750Yes, 2 Bureaus0%Yes
Buy On Trust Lending$5,000Yes, 3 Bureaus0%Yes
Stoneberry Credit$1,000No0%Yes


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