By Jason Steele


5 Min. To Read

* Editorial Disclaimer

This post may contain references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. The content or opinions contained within this post come from third party journalists or members of the Editorial Team and are not supplied by any of our partners.

Retail, co-branded credit cards can be confusing. There's a difference that many people are not aware of, primarily that co-branded cards are issued by a bank and can also be used wherever other major credit cards are accepted based on the network (Mastercard, Visa, etc.). These cards will typically have rewards structures to incentivize you to shop at the retailer and will have earnings on purchases that reflect that. Jason asks this group of experts what they look for in a co-branded store card:

What features do you look for in a credit card co-branded with a retailer, and why?

Monica Kowollik - Hailing from, Monica has covered credit card and personal finance news for over 15 years

I have always used co-branded store credit cards. I follow two basic rules when choosing and using these types of credit cards. The first rule is obvious. I Always pay the balance in full to avoid all interest charges. This way, I receive the total value of all the store reward benefits I earn. The second is just as important — only open store lines of credit where I shop most regularly. It can be tempting, but I am looking for more in rewards than just the one day only discount of 20%.

So will I shop here again becomes an important question I ask myself? In addition to that, will this card be useful? What are the everyday reward benefits of having this co-branded store card? When store credit cards are co-branded with Visa, MasterCard, or American Express, this often allows you to earn even more rewards outside of the store's physical locations. When you add this to the mix, the reward earning potential begins to expand. The co-branded store cards I have in my wallet now allow me to earn rewards on categories like dining, groceries, and gas. I also get notified with exclusive limited-time reward promotion deals. These are the perks and benefit features most important to me when looking at co-branded store credit cards.

Dave Grossman - Runs the community

When it comes to co-branded credit cards, the number one thing I - and any consumer - should look to answer is "Why?"

Why would I want to put spend on this card versus one of the cards already in my wallet? Does it offer any specific benefits that I truly value that I can't get from my primary cards? Or does it offer a higher rebate on my spend such that it would produce a significant enough savings to bother?

For example, the Apple Card has gotten a lot of publicity lately for good reason - Apple knows how to market! But there is very little reason to carry a card that earns 2% on mobile purchases and 1% on non-mobile purchase. It earns 3% at Apple, so perhaps if you buy a ton of Apple products each year, this would be a fit. I think one thing that could have made it a win would have been including AppleCare when you buy Apple products with the card. But right now, it's not compelling.

Which leads us directly into another consideration, especially when it comes to mechanical or electronic items prone to breaking, is the extended warranty. I put all of my electronics purchases on an American Express card because f their fantastic extended warranty coverage. Would a store branded card offer better coverage? Or worse? In a majority of situations, you will not find that a retail co-brand card outdoes the benefits of mainstream issuer cards. Every situation is unique so I always recommend a simple analysis of your own situation.

Spencer Reese - Connects American military servicemembers with the best travel and cash back credit cards on his site Military Money Manual.

When I look at credit cards co-branded with a retailer, I am primarily looking at the long term benefits they offer rather than the short term. For instance with the Chase Amazon Prime Rewards card, it's not the welcome bonus that's attractive. You can get much better welcome bonuses with other cash back or travel rewards cards.

The value add of the Amazon Prime card comes from the continuous 5% cash back at Whole Foods and purchases. Since I shop at these two stores regularly, this an easy way to rack up a lot of cash back throughout the year on purchases I would be making anyways.

Another example of recurring benefits is the Target REDcard. This card gives you free 2 day shipping and extended returns at Target shops and online. These perks can be valuable if you are a frequent Target shopper.

An annual reward of some sort is a great feature of a store branded card. Some cards give you an annual discount coupon or code to use in the shop or online. These kinds of incentives are a good reason to keep these store co-brand cards open, even if you only use them at the co-branded shop.

Finally, one other feature I look for is low or no annual fees. If there is an annual fee, there should be a large incentive or annual bonus to offset the fee. Unless you are making your money back above the annual fee, there's no point in paying an annual fee on a co-branded store card.

Jason Steele - Founder of the credit card media conference CardCon

When I look for a store credit card to recommend, I think a few things are important. First, it has to have very competitive rewards. That means something like 5% back on in-store purchases, and bonus categories for other purchases, not just a flat 1% cash back.

Also, I don’t want to have a card from every retailer I visit, only the ones with the best rewards. I also think a store card should be accessible to people with a short credit history and those with credit problems. And if a store card can provide some additional benefits, like free shipping for online purchases, or a longer return period, that’s all the better. Finally, store cards should offer some sort of sign-up bonus, or perhaps additional rewards for a limited period of time.

Andy Shuman - Author of the Lazy Traveler's Handbook series

Store credit cards are not exactly my things because I don’t value anything in a credit card as much as a juicy welcome bonus. Having said that, I do carry one retailer card: Chase Amazon Prime. There are a few reasons why – first, the card gives me 5% cash back. Second, I shop Amazon a lot. Third, I’ve had Prime Membership for many years and would keep it with or without the card.

Due to the absence of sensible welcome bonuses, I wouldn’t value a retail credit card beyond increased cash back (I’d look for 5%) or guaranteed member discounts (like what you get with the Kohl’s card). Of course, retailers cards may offer more perks, like longer returns periods, member-only sales, etc, and those perks can be valuable to some shoppers, but I don’t care much about them.

If you choose to use a retailer credit card, remember that these cards typically have extremely high APRs (27.24% for Macy’s card, for example, at the time of writing). That might not matter if you pay your balance off every month, but if you don’t – then no discount or cash back would be worth paying that kind of interest.

Andrew Schrage - CEO and co-owner of Money Crashers

Two very important factors to consider when choosing a credit card co-branded with a retailer are the card's interest rate and its rewards program.

Many co-branded retail credit cards offer teaser rate promotions, sometimes at 0% APR. These promotions often stretch 12 months or longer, and may be tied to purchase value. For instance, the Home Depot's consumer credit card offers a standard 6-month 0% APR promotion on specific purchases above a certain amount. Individual stores or departments may have discretion to extend even longer 0% APR promotions, up to 24 months from the purchase date. As long as cardholders zero out the balance associated with the purchase by the end of the promotional period, they pay no interest.

Regarding rewards, there are three important factors: portability, versatility, and convenience. Before applying for a rewards-bearing store credit card, ask yourself: How useful are these rewards, really? Can I use them for something other than credit against in-store purchases? For instance, the Amazon Prime Rewards Visa Signature Card's rewards are as good as cash -- you can redeem them for general statement credits, even if you haven't made an Amazon or Whole Foods purchase in the prior statement cycle. The Target REDcard's 5% instant discount is ultra-convenient. You literally don't have to remember to apply it, as long as you use your REDcard at the register or online checkout.

Greg Johnson - Owner of Club Thrifty

When it comes to co-branded retail credit cards, the most important thing I’m looking for is a discount. More specifically, I’m looking at how big of a discount I can get compared to earning points with the top-of-wallet cards I’d normally use. For example, I’ve carried a Kohl’s credit card for well over a decade. It makes sense for me to continue using the card because I do a considerable amount of shopping there for clothes and household goods. By using my card at checkout, I’m able to take advantage of special cardmember deals – which often include up to an additional 30% off my purchase. When stacked with in-store or online sales, that can add up to some hefty savings!

I’ve also signed up for co-branded cards when I’m planning on making an unusually large purchase. Some co-branded retail credit cards provide 0% financing on purchases, which typically lasts for about six months. This feature can provide an extra financial cushion when you’re trying to complete a big project. For example, the last time our family moved, we painted the entire house and replaced all the flooring. By purchasing the materials using a co-branded credit card from a big box store, we were able to grab everything we needed, pay off the card over several months, and not worry about accruing any interest. It was a win-win!

Table of Contents