If you’re an avid shopper considering getting a new credit card, then a store credit card could be worth considering. This article will go over what a store credit card is, who offers them, how you can apply for one and how you can use them to your advantage.
What are store credit cards?
Store credit cards are really just regular credit cards; you can still make purchases and you still have to pay interest on said purchases. The only difference is that they are branded and linked to specific retailers and their rewards programs, allowing cardholders to earn and redeem points.
Store credit cards initially came before credit cards, as department stores used to offer customers special benefits to reward their loyalty to that particular shop or brand. Therefore, store credit cards may offer in-store discounts and special bonuses in addition to their standard rewards programs. Some store credit cards feature cash back, which works as a discount when you spend money on your card at that retailer.
Who offers store credit cards in Australia?
There are three main providers of store credit cards in Australia at the time of writing: David Jones, Coles and Woolworths. Myer also used to offer its own Visa credit card, but it is no longer available for new applicants.
We have also provided a comparison table below which provides a snapshot of low rate credit cards on offer from Coles, Woolworths and David Jones. These products have been sorted by Balance Transfer (lowest to highest) and are based on a monthly spend of $2,000. Please note you can view more products from these providers here.
David Jones and American Express have a partnership which sees the latter offer two store credit cards; the David Jones American Express Credit Card and the David Jones American Express Platinum Credit Card. These cards make the holder eligible for both David Jones rewards as well as American Express membership rewards, making it one of the most versatile rewards programs out there.
Source: David Jones Store
Woolworths offers three store credit cards:
- The Woolworths Money Everyday Credit Card
- The Woolworths Money Everyday Platinum Credit Card
- The Woolworths Money Qantas Platinum Credit Card
Each of these three cards offers varying rates of return for points, and cardholders can earn these points at Woolworths supermarkets, BWS bottle shops and Caltex Woolworths service stations. Customers can redeem their Woolworths Rewards points for Qantas Frequent Flyer points once every three months.
For more information about how the Woolworths Rewards program works, check out our article on the matter here.
Coles currently offers five credit cards at the time of writing, according to Canstar’s database; all of which are Mastercard. These cards allow you to earn Flybuys points for money spent on the card, and Coles Mastercard is the only type of credit card that allows you to earn Flybuys points on every card on offer.
Source: Data Creative
What are the benefits of store credit cards?
If you are someone who does a lot of their shopping at a retailer like Coles or Woolworths, then finding a store credit card with a rewards scheme that fits your spending habits can save you a lot of money.
For example, a motorist who fills up at BP service stations a lot might consider a Citibank BP Mastercard, which gives discounts and cash back whenever you fill up at one of these petrol stations. Likewise, parents with multiple kids who spend hundreds at Woolworths every fortnight on food will want to consider a Woolworths credit card.
In general, the main benefit of having a store credit card – provided that you use it well and get the right one – is that you can save money on your everyday purchases; money that you can spend on things you really want, like flights and hotels.
They aren’t such a good choice if you aren’t particularly loyal when it comes to brands, as they tend to have higher interest rates and often have worse rewards earn rates on spend at different retailers. And, as with any credit card, they can seriously damage your credit score if you consistently fail to meet your monthly repayments.
Pros and cons of store credit cards
The pros and cons of store credit cards can be summarised in the table below:
|· Rewards: the stores reward you with points you make on everyday purchases.
· Bonuses: some store credit card offer a slew of perks and bonuses, such as special sign up deals, in-store discounts and more.
· Accessibility: since most store credit cards are from Visa, Mastercard or American Express, you can use them anywhere that these brands are accepted.
|· Higher interest rates: store credit cards generally accrue interest a higher rate than other types of credit cards.
· Higher annual fees: although not always true, store credit cards can attract higher annual fees.
· Other rewards limitations: while the points earnt in-store might be higher, the rate can be worse at other retailers.
How to apply for a store credit card
When it comes to applying for a store credit card, it is no different to applying for a regular credit card. You still need to meet the eligibility requirements – which usually require you to be over 18 and an Australian citizen – plus provide the usual documentation, such as:
- A form of identification
- Details of your income, assets and liabilities
- Details on your living situation
- Details on your family, such as the number of dependents you have
You can click the links in the table at the beginning of this article to be directed to a provider’s website; from there you can begin the online application process which usually takes around 10 minutes, provided you have all the above information handy.
You can also use the Canstar website to compare the many other credit cards on the market: