Macy's credit card review: Before you fill out the application you need to learn about the good, bad & ugly buried in the fine print.
There are 2 cards offered and here's the difference between them:
Macy's Store Card – Comes in 4 different tiers (Red, Gold, Platinum, Elite) and the tier you're in is based on how much you spend per year. It can only be used for purchases at their department stores. When you fill out an application at Macy's, this is the credit card you will get. While you do receive coupons simply for being a cardholder, unfortunately these cards don't earn you rebates/rewards for your spending.
Macy's American Express – This is a card they recently started offering and replaces the Visa version which was discontinued. It can be used at Macy's and anywhere AmEx is accepted. You first have the store card version before you can apply for this.
- If you spend $500 to $999 per year at Macy's you get 1.5% Rewards at their store and 1% on purchases elsewhere.
- If you spend $1,000+ per year at Macy's you get the "Preferred" version which earns 3% Rewards at their stores and 1% elsewhere.
It makes more sense to go that route, so you can earn good rewards at more than one place.
Here is my full review of the Blue Cash Preferred card.
The only time it's worth getting a card from Macy's is if you have bad credit and can't get approved for something better. Simply put, why would you choose their card that only gives a max of 3% at their stores when you can get a different AmEx that earns 3% at more than one dept store. But if you're in the process of rebuilding credit and need to start from the bottom up, then continue reading this review.
Extremely High Rates?
We all know retail cards are notorious for having high interest rates, but they take it to a whole new a level. All of the versions had a 24.50% Variable interest rate on purchases at the time of writing! This is excessive to say the least. With that high of an APR, if you ever carry a balance (even for a very short amount of time) the finance charges you pay will almost certainly be greater than the dismal rewards they give on spending.
Credit Score Requirements?
It's true their store card is easy to get, when compared to a prime-level card like Chase Sapphire or Discover. But it's not easy to get for being a store card!
It has been reported that as of August 2013, 71% of Macy's cardholders had a credit score of 651 or higher, according to Credit Karma. So that means only 29% of reported account holders have a score of 650 or below! That's not based on FICO but their scoring algorithm does a great job replicating the results. So it will likely be difficult to qualify for a Macy's credit card after bankruptcy, or if you have a score in the 500's to low 600's for whatever reason.
Two years ago someone posted on this site claiming to be a Macy's employee. This is what they said:
To reiterate, this person claims they worked for the store but that has no been verified by me. Therefore legally I need to say the above comments may or may not be true.I work at Macy's and asking for credit applications is in our job descriptions (as in, we will get fired if we don't meet a specific number of quotas when it comes to the number of people who fill out an application).
In my experiences, if you're looking for this card to rebuild your credit, avoid at all costs. I've had various people sign up for one as they either just got out of bankruptcy or are trying to rebuild their credit. Usually, they end up getting rejected, in fact most people that apply with me get rejected. I don't know the exact figures, but you basically need fair credit to qualify for this card, which is absurd in my opinion since there are many better cards out there.
One key thing left out is you do get card specific coupons which do save up quite a bit on a monthly basis. Such as 20% off every purchase and "save 20$ when you spend 50$". However, if you carry a balance and only pay the minimum (which is what most peope do when they make a payment) you really won't save anything.
So in my opinion, if you shop A LOT at Macy's and love it and never plan to carry a balance, the card has its benefits. Everyone else, steer clear.
It's worth noting that even if you had the American Express version of the Macy's card, you're not actually dealing with American Express for customer service. This is because Macy's has their own bank - called Department Stores National Bank - that manages and issues the accounts. On one hand this is a good thing, since you're dealing with them directly instead of a third-party. However the bad thing is that since they manage their own accounts and they're not a big bank, obviously they can't undertake the same credit risks that some of the other big players can. From what I've heard, they're not bankruptcy friendly... so if you have had one in the last few years, don't be surprised if your application is denied.
Usually the idea of getting rewards is what draws one to apply for it, but is it really worth it? Well review the differences for yourself and decide...
- Macys Card Rewards – Unfortunately the store-only cards offers no extra points or cash back on your spending.
- Macys American Express Rewards – Cardholders start out earning only 1.5% from Macy's. In order to earn 3% and be upgraded to the Preferred version, you have to spend $1,000+ per year at their stores and/or Macys.com. Both only give 1% on outside purchases. A $25 Star Rewards Certificate will be issued once 2,500 points been accumulated. Although this is better than nothing, the rewards are relatively low for a department store charge card (because many give up to 5% at their stores).
Neither card appears to offer any exciting benefits. For example, they list returns without a receipt as a "benefit" but that's not special when you think about it... most department stores offer returns without a receipt as long as you paid with some sort of credit card (because they can use your credit card to lookup the purchase record). Now there are monthly savings events which cardholders are invited to, but because Macys stores have sales so frequently anyway, a lot of people aren't too impressed by this.
Prepaid Macy's card for employees?
The Prepaid account is available to Macy's Employees only so that they can take advantage of the 20% employee discount. It gives you a little bit of "credit" (I have heard it's around $50 to $100) and you have to pay it all by the end of the month. However its not really a charge card akin to American Express since nothing is reported to the credit bureaus/agencies like Experian, Equifax, or TransUnion.
Do You Have Great Credit? Then Here Are Some Other Ways To Save at Macy's
I would like to be upfront with you and say that CreditCardForum does advertise cards from Discover, American Express, and most other major banks. But take a look for yourself and I think you will agree- these 2 options are a great way to save at Macy's:
The latest versions of these cards which were launched a couple years ago include select US dept stores as a spending category that can earn additional cash back. Learn more about these two cards here.
If you ever carry a balance, the high rate listed on the Macys credit card application should probably be a warning for you, right? That means the only other reasons to apply would be for the sales or rewards, but being that the latter are so lackluster, you would probably be better off skipping their cards altogether and sticking with what's in your purse or wallet.