Banana Republic Credit Card: Rewards or Ripoff?

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Banana Republic Credit Card: Rewards or Ripoff?

Postby CreditCardGuru » Sun Nov 10, 2013 12:11 pm

Most store-branded accounts are an absolute ripoff. So how do the Banana Republic Visa and store cards compare? Should you sign on the dotted line or run?

1 application = 2 card offers?

First of all you need to be aware that you can't choose which one you apply for. When you fill out the application, the card you get (if any) will be based on your credit:
  • Bananacard: This falls under the definition of a traditional store charge card. It can only be used at their affiliated stores. This one will be easier to qualify for so if you have fair or bad credit, you will be more likely to get approved for this one.
  • Banana Republic Visa Card: This is slightly different in that it operates on the Visa network so can therefore be used outside their store, too. I would estimate that the credit score requirements to be approved for the Visa would be close to a 700 FICO.
Signup Promotion = Sucky
No big surprise here... Banana Republic gives you the ol' 15% off the first purchase for signing up for their card. Unless you plan on dropping a grand or two on your first purchase, it's hard to get excited over 15%, especially when there are cash back cards with promotions worth substantially more.

Interest Rates = Lose-Lose Situation
If you ever carry a balance – even if that’s only for a month – then you definitely want to stay far away from these cards. At the time of this review, the APR on the Banana card is 24.99% percent and the Visa version isn't much better at 23.99%... so you get a loser APR either way.

Acceptance = Not Too Shabby
Regardless of whether you get the Visa or the store card, the nice thing is that you can use your credit card at Banana Republic's sister stores which are: Gap, Old Navy, Piperlime, and Athleta (a lot more versatility than most store cards). Plus, you earn rewards at all those places.

The Rewards Program = A Pleasant Surprise
For both of the Banana Republic credit cards you're going to be earning 5x points not just at their store, but also the affiliated stores mentioned above. Every 1,000 pts = $10 reward certificate (so it's basically a 5% rebate). That makes this a rewards programs that's a lot more lucrative than most credit cards in this category, which typically only reward you at one retailer.

Benefits = Better Than Expected
On the store and Visa card the benefits are fairly basic:
  • A birthday offer
  • Every Tuesday get 10% off most purchases at Gap, Old Navy and Piperlime (but not Banana Republic)
  • So called "exclusive offers and promotions" (at least that's what they say on the application)
Nothing too exciting so far, but if you upgrade to the Banana Republic Luxe benefits then it gets interesting. Your account is upgraded to the "Luxe" level when you spend $800 on your Banana Card or Banana Republic Visa Card in a calendar year at Banana Republic/Gap/Old Navy/Piperlime/Athleta (spending elsewhere doesn't count). These are the perks:

  • Basic alterations for free on Banana Republic purchases
  • No charge shipping for online purchases
  • "Choose Your Own Sale Day" offer for a 15% discount
  • Different offers and sales
  • Separate customer service phone number
Admittedly, most of the Luxe benefits are fluff (who needs free shipping when you can usually find coupon codes, right?). However there is one feature it gives that could definitely come in handy and that is the free basic alterations. If you're someone who wears a pant length between 30 and 32 or 32 and 34 like I do, then this could a useful benefit you'll get a lot of use out of.

Yay or nay?

At the end of these cards are a lot better than most retail offers since you're (a) able to earn higher rewards at more than one place, and (b) the 5% is respectable.

If you're a Banana Republic shopaholic then it could make sense, especially with the Luxe benefit for free basic alterations. However keep in mind that in order to keep the Luxe status, you have to keep spending $800+ yearly at their stores.

One last caveat - the credit limits: The Credit Utilization Rate (CUR) is a calculation used in credit scoring that measures what percent of your credit limit you use. Many credit experts recommend always keeping that number below 25% on any given credit card account.

On major credit cards that is usually easy to do because the limits are often several thousand dollars and up. Unfortunately, store-only cards are notorious for giving low limits. When it comes to the Banana Republic card, on the Consumerist website a poster named Danielle alleges that her account only has (or had) a limit of $100. With a low limit like that, she obviously wouldn't be able to buy much if she wanted to keep her credit utilization below 25%.

I've seen a lot of negative customer reviews of people whining about low credit limits on this card so keep that in mind. However if you have a good credit score and are given the Visa, my guess would be the limits will be average.
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Postby dougw » Sun Nov 10, 2013 3:52 pm

Honestly, you can get Banana Republic gift cards with American Express Membership Rewards (probably other cards too). But, if you go with American Express or something more broad, you can also get rewards to a boat load of other places as well. (how much money are you really going to spend just at Banana Republic anyway?)

More on Amex and the other rewards you can get there. (also the Banana Republic gift card also works at Gap and Old Navy)

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Postby FutureBillionaire » Sun Nov 10, 2013 6:19 pm

I would rather use another card through their online mall or get gift cards as well. I get much more bang for my buck that way. I agree with jeffysdad's assessment.
Gas: Discover It, Penfed Platinum Rewards x2, Chase freedom, Citi TYP
Plane tickets: CSP
Groceries: AMEX BCP, Penfed Platinum Rewards,Citi TYP
Clothes: Express, Amex BCP, Discover IT
Amazon: Citi Forward, Cash +
Restaurants: Citi Forward, Chase Freedom, Discover IT, CSP
Hotels and other travel: Discover Escape, CSP
Movies: BofA travel rewards visa signature(fandango), Discover IT, Citi Forward, Freedom
Bars, clubs, tomfoolery: CSP, Citi Forward, Discover IT, Freedom
Balance transfers: Kroger 123 rewards
Bill Pay: Chase Ink Plus, Citi Forward
Everyday spending: Bofa Accelerated cash rewards amex, Discover Escape

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Postby Money card » Sun Nov 10, 2013 8:02 pm

you are right about that, 1 card for 3 stores.

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Postby arnoldc6 » Sun Nov 10, 2013 9:26 pm

I am about to cancel my banana republic card; nothing bad just that I don't use it often and I have to figure out a way to control my over spending tendency, I am getting about 2% cash back from my capital one anyway.. a little more attractive than this program on my opinion.

just one thing to be clear; the limit is not half as bad as they said.
I was 19 when apply to this card and I was immediately offered $2900 credit limit.
Till now that's still the highest limit card I have.

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