Admittedly, there are quite a few negative reviews involving department store cards. With high APRs and little to no rewards, you probably understand why we recommend avoiding these cards — unless you have a good reason for getting one.
And there is a very good reason to get a department store card: If you have bad credit or just very little credit history, it can be an effective strategy to apply for credit cards that are known for having easy approval. Many department store credit cards check that box.
As of Q4 2014, here are five cards that have a reputation for having consumer-friendly credit approval terms:
1. J.C. Penney
If you follow stocks and the business world, you’re probably well aware of how much trouble JCP has been going through the last couple of years. In a nutshell, they have been losing customers like crazy.
But it seems like they’ve relaxed requirements for their credit card. Granted, they’ve been known to give credit limits as low as $150. But something is better than nothing. Plus, the card gives you rewards on JCP purchases (although you have to spend a certain amount per month to get them).
This is one of the easiest department store credit cards to get with bad credit. That is, assuming you count Wal-Mart as being a department store (technically it’s not, but many people still think of it as being one).
Wal-Mart offers two cards; one is for store-use only and the other is a co-branded MasterCard, so it can be used anywhere that accepts MasterCard for payment. That one is harder to get approved for, but, as their store-only version is relatively easy to get, you might even get it with no credit history.
This department store is facing similar challenges as JCP; their customer base is dwindling, so they’re not very picky with the approval of their credit card. I have actually heard from people with credit scores in the 500’s getting approved for it. If you have no credit history, there’s a good chance they will be willing to take a risk on you.
They have a store version and a MasterCard, issued by Citi. The latter will be more difficult to get, so go for the store card. The nice thing about Sears is that that they sell a lot more than just the typical clothes and cosmetics you find at a place like JCP.
4. Von Maur
If you live in the Midwest, you may want to consider Von Maur. The others on this list outsource their credit card business to third-party banks like Synchrony and Citi. However Von Maur issues and manages their own cards, so they have more power to be accommodating.
This is the best department store for financing because they don’t charge interest. But you’re not getting off scot-free because the minimum payment due each month is much higher than your typical credit card. Here is an explanation of how it works.
This may be the hardest on the list, as you often need your FICO score to be in the 600s. Even if you can get approved, it may not be worth it because they’re known for giving people with bad credit absurdly low credit limits – as little as $100.
For those with excellent credit there is a co-branded Macy’s card from American Express (a CreditCardForum advertising partner), but if you’re reading this article, you’ll want to start out with the store-only card instead.
One more thing you need to know
You shouldn’t rely on store cards forever. Store cards can help you build or rebuild your credit, but they won’t grow with you. They generally offer few rewards and have low credit limits, meaning you’d have to have dozens in your wallet to get the benefits you’d get with a single prime bank card. Plus, many of them can be used only at their affiliate store.
So, once you’ve established a solid track record with some store credit cards and built a decent credit score, move on and apply for something better — a general purpose credit card. American Express and Discover Card often have the strictest requirements for approval, so what I would recommend doing is trying for an entry-level Visa or MasterCard as an alternative.
Updated Oct. 2, 2014