Essential store credit cards guide

Store credit cards tend to be pretty popular with people hoping to save at their favourite shops. But not all cards are created equal, so we’re here to help you better understand these credit cards by answering some of the more frequently asked questions about store credit cards in Australia. Could they be a good option or are they a thing of the past?

Store credit cards are generally reward credit cards that are specifically designed to be used when shopping with a particular brand. You can usually still use a store credit card to buy products and services from other businesses, but the rewards for shopping with the brands that have partnered with the financial institution offering the card may be higher.

Rewards come in the form of points you can redeem for discounts when shopping with the brand. Some cards may also allow you to exchange program reward points for frequent flyer points.

As with most credit cards, once you start spending your credit, you’ll be charged interest. But it’s important to check if the interest rate is higher for store cards.

Store credit cards were more common and popular in the past, and there are surprisingly few brands who have offered store cards in Australia recently. The following brands have offered store credit cards in Australia more recently, however not all are currently available:

• Kogan
• David Jones
• Myer
• Coles
• Woolworths

There are a range of alternative rewards cards now available in Australia which may be part of the reason store cards are no longer as common.

Store credit cards can offer a wide range of benefits that differ substantially between cards. However, in general, you can expect a store credit card to offer some of the following perks:

• Rewards points — You’ll usually earn points per dollar spent with the card, and you may receive bonus points when you make eligible purchases from the store and potentially some of its partners, up to the card limits.

• VIP store card offers — Some store cards will give you access to exclusive sales, offers, and events. Shopping discounts are popular among other store credit cards too.

• Freebies — Some cards may offer useful freebies like free delivery and gift wrapping.

• Other — Some store cards may offer additional perks like complimentary travel insurance.

Before you start comparing store cards, it would be in your best interests to be aware of the following key points:

• Credit card payment fees — Some store cards operate on the Visa or Mastercard network. Some retailers may charge a small fee for payments made via these networks. American Express fees may be higher and more common, and American Express cards may not be accepted in as many places as Visa and Mastercard cards.

• Annual fee — Zero annual fee store cards can be rare, and the size of the annual fee can vary between cards.

• Credit limit — You may not be able to get your desired credit limit with all store cards.

• Interest rates — Make sure you check the purchase rates and rates for cash advances which are usually higher. There may also be fees for balance transfers if it’s available (store cards aren’t usually balance transfer credit cards).

• Credit score — Lenders are likely to check your credit report before they grant you a credit card as a part of the application process.

If you’re satisfied a store credit card or rewards credit card offers what you need, take a look at our rewards card comparison guide. You can also compare a range of rewards credit cards to see if you can find one suitable for your needs.