Gap Credit Card Warning

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Gap Credit Card Warning

Postby CreditCardGuru » Mon Sep 14, 2015 2:10 pm

2015 Warning: The Gap credit card may seem attractive since Gap is one of the biggest clothing retailers, but do you know these disadvantages? Review & decide for yourself.

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Let's face... when you walk into any random mall, there's a good chance you will see a Gap Store. With over 3,200 stores, they're one of the largest apparel retailers in the world. But is that reason enough to apply?

How many times during checkout have you been asked "Would you like to save 15% on today's purchase by opening a Gap credit card account?"

The 15% is sometimes all it takes for people to bite the bait. But run the numbers for yourself... 15% of a $100 purchaser = $15 or 15% of a $300 purchase = $45.

Are those amounts good enough to hassle with yet another credit card? Most people would say no, especially considering the fact that there are credit card bonus offers of up to $150 elsewhere. So that means if you're going to apply, it should be for a better reason than some one-time Gap coupon for 15% off!So what else does the Gap card offer?
There are 2 cards but you actually don't get to choose which one you get. On the application it says this:
"By applying you agree that, if approved, GE Capital Retail Bank may provide you with a Gap Visa card or Gap Credit Card"
Lower/bad credit scores will probably only qualify for the standard card. Those with at least average credit will probably get the Visa card. Unfortunately both of them have atrociously high interest rates:

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Moving on with my review, here are the similarities and differences between the two...

  • Both earn 5x points at Gap stores and their affiliates (Old Navy, Athleta, Piperlime, Banana Republic). Every 1,000 points = $10 gift card that can be redeemed at the aforementioned stores.
  • Only the Gap Visa credit card can be used outside of these stores (it earns 1x points anywhere Visa is accepted).
  • Both cards offer occasional promotions, sales, and other ways to save. As to how useful they are is another topic we'll discuss in a moment.
  • Both cards are automatically upgraded to "silver" when more than $800 is spent in a calender year at Gap and their affiliated stores (shopping elsewhere doesn't count). With the silver level comes some extra ways to save, including free shipping for online orders and basic alterations at Banana Republic.
What's the real value of these benefits?
Some of these perks sound useful but they really aren't anything special and here's why:

The free shipping with the Gap Silver card is of little value consider that Gap.com now offers free shipping everyday on orders of $50 more more. Being that just one pair of khakis may cost you $60, this is a pretty easy threshold to meet. Conclusion? You probably will get free shipping even without the card.

The sales and discount codes/coupons are obviously useful but here's the thing... there are plenty of opportunities to access Gap coupon codes even without their credit card. For example a quick Google and I saw this printable coupon on dealspl.us for 15% off at Gap. Here is a screenshot:
example for Gap
Obviously when you see coupons and codes for double-digit savings, it makes you question the value of getting the credit card for that reason.

Basic alterations at Banana Republic is probably one of the most useful benefits if you shop there. The only drawback is can think of with this is that it only applies to "basic" alterations (the website doesn't specify what that entails) and you only get that with Banana Republic purchases, NOT those made at Gap or the other affiliated retailers.

The rewards program is obviously the bread and butter behind the Gap credit card. But will it be worth it for you? Well I would say that will depend on these 2 factors:

  1. The 5x points at Gap and affiliates equates to a 5% rebate. This is quite good for a store affiliated card. However if you only spend an average amount at their stores then you may want to save yourself the hassle. Think about it 5% of $500 spent = $25. Is that good? Absolutely. But if you were paying with something different the rebate difference between that vs. the Gap Card might only only be $15.
  2. With the 23.99% or 24.99% interest rate this card make absolutely zero sense if you sometimes don't pay all of your monthly bill. Well the same holds true for all reward credit cards, with the Gap card is especially the case since the APRs are so excessive and there is no 0% promo rate on purchases.
  3. The 1x points elsewhere (with the Gap Visa card) is average, so I wouldn't let that be a maker or breaker in your decision. It's neutral in my book.
Now you've been warned...
So if you're going to apply for it, please make sure it's for the right intentions. If you spend a few thousand per year at Gap and pay in full I would say their credit card would be a good choice to get the 5%. But if you're an average spender and/or don't pay in full, then I don't see a compelling reason to apply.

Other cards that offer 5% rebates in 2015
The credit cards from Gap aren't the only ones with 5%, not even close. Here are more. Some I advertise and others I don't. Either way, I want you to be aware of them...



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