Admittedly, there are quite a few negative reviews involving department store cards. With sky-high interest rates and little to no rewards, you probably understand why we recommend avoiding these cards altogether — unless you have no other options for getting a credit card.
And there may well be a 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.
For Q4 2016, here are five cards that have a reputation for having consumer-friendly credit approval terms:
1. Target REDcard
Most department store cards are meant for financing. But the Target REDcard is a great vehicle for earning rewards throughout the life of the card. In fact, if you’re a frequent Target shopper, you may even want to keep using it even after you’ve built up your credit.
You get 5 percent cash back (in the form of an immediate discount at the register) in Target stores and online. Using the card online also gives you free shipping and an extra 30 days to return items, beyond the standard return policy.
2. 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, which isn’t very customer-friendly, but at least they don’t give you enough rope to hang yourself with. So, something is better than nothing. On the plus sie, the card does give 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 if you have no credit history, they might be willing to take a risk on you.
Sears has a private label store credit card version as well as a general purpose MasterCard version, issued by Citi. The latter will be more difficult to get, but the store-only card may be within reach. 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.
This is rumored to be the hardest on the list, and you might 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. 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 with rewards.
One more thing you need to know
You shouldn’t rely on store cards for the long term. Store credit cards can help you build or rebuild your credit, but they won’t grow with you. They generally offer few if any 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. Plus, if you carry a balance the interest charges will really put a dent in your wallet. In that regard, it’s probably a good thing that they don’t give you high credit limits, since the finance charges could eat up your paycheck in a hurry.
Updated September 23, 2016