HOSTED BY: 1 AIR TRAVEL
We’ve all been there: You’re checking out after a big purchase or a full day of shopping, and the cashier tells you how much money you’ll save if you sign up for the store credit card today.
And none of us would be here if we didn’t love saving money, so that offer makes even the savviest among us pause. But while It’s tempting to jump on those savings in that moment, store credit cards usually aren’t your best option.
Then again, some store cards make sense for certain shoppers.
Below, we’ll look at four popular store cards and how they stack up against four of our favorite cash-back cards.
What is a store credit card?
A store credit card is a card offered by a specific retailer. Many are what’s known as closed-loop cards, meaning you can only use them in that specific store. What we’re looking at today, however, are known as open-loop cards. These cards have a store brand in the name, but you can use them anywhere you would use any other credit card.
However, even though you can use these cards like any other, some of them limit your rewards to their specific store only. Before you sign up for a store credit card, make sure you think about how much it will benefit you in the long run.
Should I get the Sephora Visa® Credit Card?
The Sephora Visa credit card is appealing for two reasons: It offers a 25% discount on your first purchase within 30 days of account opening and earns the highest bonus on Sephora purchases of any card available.
The information for the Sephora Visa Credit Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
RGSTUDIO/GETTY IMAGES
Since most of us spend between $50 and $500 every time we step foot in the store, this can seem like a worthwhile card to have. However, most Sephora customers are still better off with a cash-back card, like the Capital One SavorOne Cash Rewards Credit Card. Here’s why:
Sephora VisaCapital One SavorOne Cash RewardsWelcome bonusGet 25% off your first card purchase at Sephora and a $20 Sephora reward after spending $500 outside Sephora in the first 90 days of account opening.Earn a $200 cash bonus after spending $500 on purchases within the first three months of account opening.Annual fee$0.$0.Earning4% on Sephora purchases.1% on non-Sephora purchases.3% on dining.
3% at grocery stores.
3% on entertainment purchases.
3% on popular streaming services.
1% on all other purchases.Rewards redemptionReceive Sephora Rewards certificates in $5 increments.Cash back as a statement credit, check or gift card.
Option to redeem through PayPal or on Amazon.com.Other benefitsEarn 2 Beauty Insider points for every dollar spent.
Cardmember-only offers.10% cash back on purchases on Uber and Uber Eats, complimentary Uber One membership through Nov. 14, 2024.
Access to Capital One Entertainment.
No foreign transaction fees.
Travel accident insurance.
Roadside assistance.
Extended warranty protection.
Verdict: If you spend more of your budget at Sephora than you do on food, the Sephora Visa card might be worth it for you.
However, if most of your budget goes to food and entertainment, you’re much better off getting the SavorOne and just using your welcome bonus and cash-back rewards to help cover your Sephora splurges.
For more details, read our full review of the Capital One SavorOne card.
Official application link: Capital One SavorOne Cash Rewards Credit Card
Should I get the Apple Card?
The Apple Card can seem like an obvious choice if you’re about to make a large Apple purchase.
The information for the Apple Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
ZACH GRIFF/THE POINTS GUY
But while it will earn you bonus rewards on your big purchase, it isn’t necessarily your best option. Let’s check out how it compares to the Blue Cash Everyday® Card from American Express.
Apple CardAmex Blue Cash EverydayWelcome offerNone.Up to $250: Earn $100 back after you spend $2,000 on purchases on your card in the first six months of card membership and 20% back as a statement credit on purchases with PayPal in the first six months of card membership, up to $150 back.Annual fee$0.$0 (see rates and fees).Earning3% on Apple, T-Mobile, Nike, Uber, Uber Eats, Panera, Walgreens and Exxon Mobil purchases.2% when you use Apple Pay.
1% on all other purchases (when you use your card number for online purchases or use your titanium card in-store).3% at U.S. supermarkets (on up to $6,000 in purchases annually, then 1%).
3% on U.S. online retail purchases (on up to $6,000 in purchases annually, then 1%).
3% at U.S. gas stations (on up to $6,000 in purchases annually, then 1%).
1% on all other purchases.Rewards redemptionApple Cash is applied to your account, so you can use it directly by paying with your card through Apple Pay or receive it as a statement credit.Redeem cash back as a statement credit.Other benefitsOption to pay for Apple products over time without interest.
Access to card quickly upon approval through Apple Pay.Purchase protection.*
Access to American Express Experiences.
Split-pay feature for group purchases.
$87 Disney Bundle credit, paid in $7 monthly statement credits when you use your card to spend $12.99 or more each month on a Disney Bundle subscription.
$180 Home Chef credit, paid in up to $15 in statement credits per month when you use your card for your Home Chef purchases.
Car rental loss and damage insurance.**
* Eligibility and benefit levels vary by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company.
** Eligibility and benefit levels vary by card. Not all vehicle types or rentals are covered, and geographic restrictions apply. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company. Coverage is offered through American Express Travel Related Services Company, Inc.
Verdict: If a big Apple purchase is prompting you to consider the Apple Card, you’re better off getting the Amex Blue Cash Everyday card, since you can make your Apple purchase online and earn 3% back with it. Plus, your purchase can help you reach the spending requirement to earn the welcome bonus on your card, earning you even more with your purchase. And you’ll have peace of mind knowing that your new item is protected against accidental damage or theft by American Express purchase protection, which the Apple Card doesn’t offer.
If you find yourself using Apple Pay and being able to earn 2% with the Apple Card on a lot of purchases that would fall under the 1% category for the Amex Blue Cash Everyday, you might decide that the Apple Card is the better card for you. However, if you do much of your shopping online, earning 3% back on your Apple purchases as well as your grocery and gas purchases with the Blue Cash Everyday card is definitely your better option.
For more details, read our full review of the Amex Blue Cash Everyday Card.
Apply here: Blue Cash Everyday Card from American Express
Should I get the Amazon Prime Rewards Visa Signature card?
If you buy almost everything at Amazon, you’ve almost certainly been tempted by the savings Amazon promises if you sign up for the Amazon Prime Rewards Visa Signature Card during checkout.
The information for the Amazon Prime Rewards Visa card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
CATHERINE FALLS COMMERCIAL/GETTY IMAGES
And the Amazon Prime Rewards Visa Signature is a good card — in some cases. But here’s how it stacks up against the Chase Freedom Flex.
Amazon Prime Rewards Visa SignatureChase Freedom FlexWelcome bonusGet a $100 Amazon gift card instantly upon approval.Earn $200 cash back after spending $500 on purchases in the first three months from account opening.Annual fee$0, but Prime membership ($139 annually) is required.$0Earning5% at Amazon and Whole Foods.2% at restaurants and gas stations.
1% on all other purchases.
5% on rotating quarterly categories (on up to $1,500 spent, then 1%); activation required.
5% on travel purchased through Chase Ultimate Rewards.
5% on Lyft (through March 2025).
3% on dining, including takeout and eligible delivery services.
3% on drugstore purchases.
1% on all other purchases.Rewards redemptionRedeem for eligible purchases at Amazon.com or for cash back through a statement credit or electronic deposit into an eligible checking or savings account.Redeem for cash, gift cards or travel, or pay with points for eligible products and services.Other benefitsEarn 10% back or more on a rotating selection of Amazon products and categories.
No foreign transaction fees.Complimentary three-month DoorDash membership (when you sign up by Dec. 31, 2024).
Cellphone protection.
Shopping protections.
Trip cancellation and interruption insurance.
Verdict: If you spend a significant portion of your budget at Amazon and Whole Foods and want the simplest path to earning 5% on your spending, the Amazon Prime Rewards Visa card is an excellent option.
However, if you spend enough to maximize the Freedom Flex 5% categories and dine out often, you’ll benefit from its higher welcome bonus and dining earnings enough to make it your better option. Plus, you can still use it to earn 5% on your Amazon spending by purchasing Amazon gift cards from stores in the quarterly categories (currently grocery stores, for example) and using those to do your Amazon shopping.
For more details, check out our full review of the Freedom Flex.
Apply here: Chase Freedom Flex
Should I get the Costco Anywhere Visa® Card?
If you’re a Costco member, chances are good that you spend plenty of money there and want to ensure you’re earning rewards on that spending. And when it comes to earning credit card rewards, Costco has the added complication of only accepting cards in the Visa network, so you might miss out on some earnings if your favorite card is part of a different network.
TOBY SCOTT/SOPA IMAGES/LIGHTROCKET/GETTY IMAGES
The Costco card is actually one of our favorite store cards, but that doesn’t mean it’s the best choice for everyone. Here’s a worthy alternative:
Costco Anywhere VisaWells Fargo Active Cash® Card (rates and fees)Welcome bonusNone.Earn a $200 cash rewards bonus when you spend $1,000 on purchases in the first three months.Annual fee$0, but a Costco membership is required ($60 annually).$0.Earning4% on eligible gas and EV charging (for the first $7,000 per year, 1% after that).3% on restaurants and eligible travel.
2% on all other purchases from Costco and Costco.com.
1% on all other purchases.2% cash rewards on purchases.Rewards redemptionRewards are issued annually after your February billing statement closes. You will receive a credit card reward certificate that you can redeem at Costco for merchandise or cash back.Redeem to offset eligible purchases, as a statement credit, for cash at a Wells Fargo ATM, gift cards or through PayPal.Other benefitsPurchase protection.Cellphone protection up to $600 against damage or theft when you pay your monthly cellphone bill with the card (subject to a $25 deductible).
Verdict: It’s worth noting that both cards earn 2% on Costco purchases. Beyond that, if you spend most of your money on gas, restaurants and travel, the Costco Anywhere Visa has an earning structure that will benefit you most.
However, if you spend much of your budget on purchases that fall outside of those categories, you’ll get more rewards from the consistent 2% earnings on the Active Cash. Plus, that $200 cash rewards bonus is a nice additional perk.
For more details, read our full review of the Costco Anywhere Visa and our full review of the Wells Fargo Active Cash cards.
Apply here: Costco Anywhere Visa Card by Citi and Wells Fargo Active Cash Card
Other ways to save at your favorite stores
Having a card that earns extra rewards at your favorite stores isn’t the only way to earn on your spending there. Here are some of our other favorite ways to save regardless of where we’re shopping.
Use a shopping portal
Always use a shopping portal when you shop online. Sites like Rakuten allow you to earn additional cash back or rewards points on many store purchases.
MSTUIDOIMAGES/GETTY IMAGES
Check your merchant offers
Check the merchant offers on all your cards regularly, and add any that you think you might use. We recommend using a note on your phone to keep track of which offers are on which cards, so you can easily reference it when you’re ready to make a purchase.
Buy gift cards
If you have a credit card that earns bonus points for shopping at grocery or office supply stores, you can purchase gift cards from these stores for the ones you want to make a purchase from. For instance, since grocery stores are currently one of the 5% categories on the Freedom Flex, you could buy a Sephora or Amazon gift card from your local grocery store and earn 5% on that purchase.
This strategy requires an extra step but allows you to earn bonus points on specific store purchases without having to get a store credit card.
Bottom line
We generally recommend skipping the store credit card and signing up for a rewards card that has a better sign-up bonus and earning structure. However, some store cards are exceptions, like the Costco one.
Regardless, make sure you treat a store credit card decision like any other major financial decision and do your research rather than falling for a tempting offer in the moment. No matter where you land, you’ll feel good knowing you’re earning solid rewards on your spending.
For rates and fees of the Amex Blue Cash Everyday, click here
For rates and fees of the Wells Fargo Active Cash, click here
Title: Store vs. cash-back credit cards: Which one should I get?
Sourced From: thepointsguy.com/guide/store-cards-vs-cash-back-cards/
Published Date: Wed, 25 Jan 2023 17:00:55 +0000
No comments:
Post a Comment