Financial Advice

4 Signs You Should Dump That Store Credit Card

Are you often tempted to apply for a store credit card when offered a discount? If so, then you might have more than a few store credit card accounts open. And while the discounts and perks that these cards offer can be nice, store cards are not always the most competitive products.

So if you are unsure of whether to keep all of your store credit cards, consider these four signs that it’s time to dump one of them.

1. You never use the card. A lot of people sign up for a store credit card just to get a one-time discount. If you did that, and then never used the card again, you probably don’t need to have that account open forever. Keeping it open for no reason will unnecessarily open you up to the possibility of a fraudulent charge, and can be a hassle when you receive meaningless statements or have to change your address when you move.

2. You find yourself paying more to earn rewards. Retailers love store credit cards because they act as an advertisement that customers keep in their wallets. But if you are passing up much better deals at competing retailers in order to earn a tiny amount of rewards on your store credit card, then your store card is costing you more money than its saving.

3. The rewards are uncompetitive. Store credit cards will vary tremendously in value of the rewards offered. While some cards might offer outstanding rewards worth 5% of your spending or more, others may only return a paltry 1% to 2%. In fact, there are now cash-back cards offered with no fee that will rival the rate of return for some weaker store cards, and you can spend your cash-back rewards anywhere you want, not just at a particular store.

4. You carry a balance. While store cards can be great for earning rewards and receiving perks, they are generally a very expensive way to borrow money. Store credit cards typically have between 20% and 30% APR, which is much higher than most credit cards offer to applicants with good or excellent credit.

Alternatives to Store Credit Cards

Once you have made the decision to stop using, or even cancel your store credit card, what are your alternatives? To replace your store credit card, consider these general purpose credit cards.

American Express Blue Cash Everyday and Blue Cash Preferred

The American Express Blue Cash Everyday card offers 3% cash back at U.S. supermarkets on up to $6,000 per year in purchases, 2% cash back at U.S. gas stations and select U.S. department stores and 1% cash back on all other purchases. These rewards compare favorably to many store credit cards. In addition, new cardholders can receive $100 cash back after spending $1,000 on their card within the first three months of account opening. In addition, new cardholders also receive 15 months of interest-free financing on both new purchases and balance transfers, with a 3% balance transfer fee.

There is no annual fee for this card, but to get an even higher rate of return, consider the Blue Cash Preferred version. It offers 6% cash back at U.S. supermarkets on up to $6,000 per year, 3% cash back at U.S. gas stations and at select U.S. department stores, and 1% cash back on other purchases. This card also features the same 15 months of promotional financing, but offers a $150 cash-back bonus after spending $1,000 within three months. There is a $75 annual fee for this card.

Citi Double Cash

If you want to just forget bonus categories and earn a high rate of return on all of your spending, then the Citi Double Cash card is strong choice. It offers a total of 2% cash back, 1% at the time of purchase and another 1% when payment is made. This card also features 15 months of interest-free financing on both new purchases and balance transfers, with a 3% balance transfer fee. There is no annual fee for this card. This card also requires excellent credit.

If you’re unsure where you stand, you can get a free credit report summary, updated every 30 days, on Because applying for a card causes a small, temporary ding to your score, it’s a good idea to choose a card marketed to people whose credit profile is similar to yours. You don’t want to take the hit to your credit score and not get the card.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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This article by Jason Steele was distributed by the Personal Finance Syndication Network.