Retail cards are fashionable, almost every retail store has the cards today. If you’re
reading this, you’re probably contemplating signing up for one or already have one but
not sure if it’s good for you or not. Many people fall for them because retailers have a
high success rate convincing their customers that they can build their credit scores faster
and earn discounts whenever they use the retail cards. That’s a partly true.
Typically, the cards are supposed to give us an opportunity to earn cash backs or discounts
on particular products or brands. Let’s say you and I are Victoria secrets customers, you
have their retail card and I don’t. If the retail gives a 20% discount offer to card holders
for a product which costs $100, I will pay $20 more for the product than you will. The
offers could also come in the form of free transportation of goods to your destination or
loyalty points which can be redeemed for other Victoria Secrets products.
Normally, these offers could help you save a lot of cash if you visit the store often or if
you faithfully pay your credit balances every month as per the agreements with the store.
If you pay your bills in time, the cards could significantly help you build your credit score.
At least that’s how it’s supposed to be but things are not always what they seem to be.
The retailers have become creative with the cards and are using them to get cash unfairly
from customers. Here’s are 5 reasons why retail cards don’t make sense.
High Interest Rates
The retails cards have a very high interest rates compared to the major credit cards. The
APR cards for example have interest rates of between 20 percent and 30 percent which
makes balances very expensive. When you fail to pay the balance within the given period
the high interest rates apply instantly. You’d end up paying much more for your shopping
than if you paid for the shopping in cash or used a main credit card which comes with
fairer interest rates.
The rewards can be very complicated and difficult to understand
Most retailers have become very creative with the perks for customers with the cards.
For example, Victoria Secrets would tell you that with a certain amount of shopping you
earn credits for free tailoring services on their products. However, you must shop enough
to earn a given status to enjoy this privilege. By the time you reach the preferred status,
you shall have probably made them more profit than the actual cost of the ‘’free’’ tailoring
Major credits card will give your better credit approvals that the retail cards
Many people fall for retails cards believing that the credit cards will improve their
approval rates. Well, it’s true they that the retail cards help you build your credit score
but compared to the main retail cards they have very small impact your credit score. The
major credit cards are therefore a better option because they have more positive impact
on your credit score than the retail cards.
Retail Cards Encourage Unnecessary Debt
As long as you carry a retail card around you’ll be a victim of the high temptation to buy
something whenever you’re around the store. In as much as they raise your credit limits
if you can’t control the urge to spend or if it causes you to practice impulse buying you’ll
soon be in debt.
Their usage is limited
As the name hints, most of the retail cards can only be used with specific stores. So if you
run out of gas and your car has to be towed away, your retail card can’t help you, but a
major credit card like the Visa card can. That’s why the retail cards really don’t make
In a nutshell; the retail cards can help you save some money and build your credit score
but if it happens that you can’t pay your dues in time or not disciplined enough to control
the urge to shop whenever you are around the retail, they could cost you dearly. Their
usage is limited and major credit cards are a better option if you are looking to build your
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