We all know Kohl’s offers some great bargains, but is the Kohls credit card actually a good deal or just a gimmick? This review has the answer.

Why Kohls?

Founded in ’62, this Wisconsin-based department store now has over a thousand locations, spread across the country in all but one state. They’re now one of the nation’s largest retailers, with an emphasis on discount clothing.

But even though they may be a great place to go to pick up a sweater or pair of shoes, you may want to think twice before you apply for their credit card. Here’s why…

The rewards

Of course this is probably what sparked your interest in the Kohls credit card in the first place. They offer an incentive to reel you in and get you to apply for the card; a 15% savings on your first purchase. This is a common “deal” a lot of store charge cards offer, hoping it will persuade you to grab an application. Savings are always great, but don’t fall for this bait and get hurt in the long run…

You see, the reason department stores have to offer gimmicks like this to get people to fill out the application is because their cards are crap, to put it frankly. Why you ask? Here are the reasons…

The fine print about the interest rates
If you carry a balance – ever – this card is going to hurt, and it’s going to hurt bad! At the time of this review, the APR is an outrageous 21.9 percent!

To make matters worse, they may give you “penalty” APR which is even higher – 24.9 percent! According to the Kohls cardmember agreement, they may give you this higher rate if you (a) make a late payment, or (b) make a payment that is returned. So if you pay on time, you’re paying almost 22% and if you make a late payment, you might be paying almost 25% or possibly higher!

It has very limited use
Because it’s not a part of a major payment network (like MasterCard or Discover) it can only be used at the Kohl’s department store. So it serves no use anywhere else.

Will it look good on your credit record?
Many experts warn that you should avoid store charge cards at all costs. Why? Because every time you apply for a credit card, it results in what is known as a “hard pull” on your credit report. This inquiry is used to check your creditworthiness, but in some situations it can purportedly drop a FICO score by up to 10 or 20 points. This is why cards should be opened sparingly and only when it’s a credit card you really want and can use everywhere.

A Better Option

You can do much better than the Kohls credit card. Check out these credit cards that give high cash back at clothing retailers.

Updated Jan 2012