Writer: Brittney Mayer
Editor: Jon McDonald
Reviewer: Ashley Fricker
Key Takeaways
Department-store credit cards are typically closed-loop cards that only work with a specific retailer or collection of brands. An open-loop credit card can be used practically anywhere.
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OneMain BrightWay® Card: Best open-loop option that can help you build credit while earning rewards.
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Surge® Platinum Mastercard®: Best open-loop alternative with up to a $1,000 credit limit.
Department stores are a feast for the eyes. With their dazzling lights, gleaming counters, and inviting window displays, they naturally draw you in to discover their name-brand offerings. To make it even more enticing, many department stores provide store credit cards that offer special rewards and discounts.
What’s not as pretty, however, is having your credit card application denied because of your poor credit. But there’s no need to feel too rejected — most store credit cards aren’t the deal they seem to be. Store cards usually charge high APRs and can only be used, or have their rewards redeemed, on branded purchases.
Typically, rewards cards let you unlock better deals and more substantial savings. The catch is, if your credit isn’t top-notch, your choices are limited, whether you’re eyeing a store credit card or a general rewards card. But don’t worry; even with a lower score, there are still several cards worth exploring.
In this article, we’re going to explore a range of cards you might want to consider, from traditional credit cards to some of the top department store cards for bad credit.
First, Consider an Open-Loop Card For Bad Credit
Many store cards sound sweet to the ears, but have limitations that can sour your credit score. Branded, closed-loop credit cards not only prohibit how or where you use them, but they also require a hard credit pull to open.
So if you’re building credit and trying to pay down debt, it’s hard to warrant a department store credit card that can only be used on a shopping haul at your local mall.
Instead, you’re better off staying on budget and scooping up extra savings in the process through an all-purpose, open-loop credit card that can be used on everyday purchases.
The best credit card issuers for bad credit have easy online applications and flexible conditions that will work for your needs.
- See if you’re pre-approved with no impact to your credit score.
- Qualify for rewards like a credit limit increase (subject to credit approval) or APR decrease in as little as six months.
- Earn unlimited 1% cash back on purchases.
- Building your credit? We report to the major credit bureaus and good payment habits can pay off.
- Easily manage your account and make payments using BrightWay App.
- BrightWay cards are issued by WebBank.
- See the OneMain BrightWay® Card rates and fees.*
| Application Length | Interest Rate | Reports Monthly | Reputation Score |
|---|---|---|---|
| 5 minutes | 35.99%* | Yes | 9.5/10 |
- Up to $1,000 Initial Credit Limit
- See if you Pre-Qualify with No Impact to your Credit Score
- Less than perfect credit? We understand. The Surge Mastercard is ideal for people looking to rebuild their credit.
- Unsecured credit card requires No Security Deposit
- Perfect card for everyday purchases and unexpected expenses
- Monthly reporting to the three major credit bureaus
- Use your card everywhere Mastercard is accepted at millions of locations
- Enjoy peace of mind with Mastercard Zero Liability Protection for unauthorized purchases (subject to Mastercard guidelines)
- Apply with Confidence! There is no impact to your credit score if you’re not approved. See terms.
| Application Length | Interest Rate | Reports Monthly | Reputation Score |
|---|---|---|---|
| 5 minutes | 35.90% Fixed | Yes | 8.5/10 |
- Guaranteed $700 credit limit if approved.
- Apply with Confidence! There is no impact to your credit score if you’re not approved. See terms.
- Don’t Have Perfect Credit? No Problem!
- Join over a million consumers who are working on building their access to credit.
- Zero Fraud Liability – Peace of mind that comes with having a Mastercard.
- Get the credit you deserve, even with less-than-perfect history.
- No security deposit, and a path to better credit.
| Application Length | Interest Rate | Reports Monthly | Reputation Score |
|---|---|---|---|
| 8 minutes | See terms | Yes | 9.0/10 |
- Earn Cash Back Rewards* – 3% on Eligible Gas, Groceries, and Utilities, and 1% on All Other Eligible Purchases
- Up to $1,000 credit limit subject to credit approval
- Prequalify** without affecting your credit score
- No security deposit
- Free Access to your Credit Score†
*See Program Terms for important information about the cash back rewards program.
** Prequalify means that you authorize us to make a soft inquiry into your credit history (that will not affect your credit) to create an offer. If you accept an offer a hard inquiry will be made. Final approval is not guaranteed if you do not meet all applicable criteria (including adequate proof of ability to repay). Income verification through access to your bank account information may be required.
† Your credit score will be available in your online account starting 60 days after your account is opened. (Registration required.) The free VantageScore 4.0 credit score provided by TransUnion® is for educational purposes only. This score may not be used by The Bank of Missouri (the issuer of this card) or other creditors to make credit decisions.
| Application Length | Interest Rate | Reports Monthly | Reputation Score |
|---|---|---|---|
| 7 minutes | 36% Fixed | Yes | 8.0/10 |
- Earn Cash Back Rewards* – 3% on Eligible Gas, Groceries, and Utilities, and 1% on All Other Eligible Purchases
- Use Anywhere Mastercard is Accepted
- No Security Deposit
- $0 fraud liability**
- Free access to your Credit Score†
*See Program Terms for important information about the cash back rewards program.
**Fraud liability subject to Mastercard rules.
† Your credit score will be available in your online account starting 60 days after your account is opened. (Registration required.) The free VantageScore 4.0 credit score provided by TransUnion® is for educational purposes only. This score may not be used by The Bank of Missouri (the issuer of this card) or other creditors to make credit decisions.
| Application Length | Interest Rate | Reports Monthly | Reputation Score |
|---|---|---|---|
| 7 minutes | 36% Fixed | Yes | 8.0/10 |
+See More Credit Cards for Bad Credit
After six months of diligent spending and paying your bills on time, you’re likely to notice an improvement in your credit score. Plus, you may qualify for better card options with fewer fees.
Keep in mind that these options depend on your current credit status and how much existing debt you’ve managed to reduce.
Best Department Store Cards For Bad Credit
Department stores are a shopping paradise for name-brand clothing, luxury makeup, and premium housewares. However, they can also be a hotspot for high prices. Carrying a balance on a store-branded card with a high APR can quickly undermine your savings and make the debt harder to repay.
However, if you’re a repeat customer or if you always have a long list of gifts to buy for the holidays, you may reap some benefits from a department store card.
Perks run the gamut from exclusive sale access and products to special financing options on large purchases from the brand. Just be mindful to pay your statement balance in full by the due date to avoid accumulating interest charges.
While many brands offer branded credit cards that you can use outside their stores, these cards typically have tougher qualification criteria.
1. Kohl’s Credit Card
The Kohl’s Credit Card lets you combine eligible cardholder discounts with Kohl’s Cash® and other rewards to make the most of your savings.
- Earn 7.5% in rewards on qualifying Kohl’s purchases
- Receive a one-time 40% off coupon as a bonus
- Pay no annual fee
The card carries a high variable APR, so it’s best to pay the balance in full whenever possible. Late payments may result in a fee of up to $40, although current terms state that paying late will not trigger a penalty APR.
2. Macy’s Credit Card
Macy’s Credit Card holders earn 2 to 5 Star Rewards points per dollar on qualifying Macy’s purchases, depending on their Star Rewards status.
- Earn $10 in Star Money for every 1,000 Star Rewards points
- Receive a new-account discount on qualifying purchases
- Pay no annual fee
Even if you accumulate Rewards points, they won’t be enough to offset the high interest charges from holding a large balance on your Macy’s Credit Card. To avoid those high interest charges, try to pay off your card each month and keep up with your payments.
3. Dillard’s Credit Card
The Dillard’s Credit Card rewards cardholders 2 points for every dollar spent at the store, whether it’s for your wardrobe or on goods for your household.
- Earn 1,500 points and choose a 10% Off Shopping Pass or a $10 Rewards Certificate
- Qualify for a 10% Welcome Shopping Pass after spending $100 at Dillard’s on the day the account is opened.
The Dillard’s Credit Card carries a high variable APR, so interest charges can quickly outweigh the value of its rewards if you carry a balance. It does not charge an annual fee.
4. TJX Rewards Credit Card
With the TJX Rewards Credit Card, you’ll earn 5% back in rewards on qualifying purchases at T.J. Maxx, Marshalls, HomeGoods, Sierra, and Homesense, online and in stores.
- Get a $10 Rewards certificate for every 1,000 points you earn
- Receive a 10% coupon on your first purchase after opening an account
- Pay no annual fee
The perks for frequent T.J. Maxx shoppers may not outweigh the card’s high APR. To avoid extra costs that could lead to more debt than savings, make sure to pay off your card balance in full each month.
5. Belk Credit Card
The Belk Rewards+ Credit Card offers you special savings and exclusive perks if you’re a frequent shopper at this department store. It charges no annual fee, and you’ll:
- Earn up to 7% back in Belk Reward Dollars on eligible Belk purchases
- Earn $10 in bonus Belk Reward Dollars after making a purchase on the day you open the account
But the card’s high APR can easily outweigh its rewards if you carry a balance, and the store-only version can be used only for Belk purchases.
6. JCPenney Credit Card
The JCPenney Credit Card earns rewards on qualifying purchases made at JCPenney stores and online. In addition to rewards, you’ll also receive a new-account discount on a qualifying first purchase.
- 1.5 points per dollar on qualifying JCPenney card purchases
- $10 CashPass Reward after reaching 200 points
- Pay no annual fee
If you regularly shop at JCPenney, you can earn meaningful savings despite the card’s limited usability. But its high APR, potential penalty APR, and late fees make paying on time and avoiding a balance especially important.
What Is a Department Store Card?
Most department store cards are similar to traditional credit cards. But instead of using them anywhere you want, you typically can only use them at the store that offers them.
An example is the Old Navy credit card, which you can use to pay for purchases at Gap stores, which owns Old Navy. These include Gap, Banana Republic, Old Navy, and Athleta.
You may also earn rebates or cash back on purchases you make on the card. Other branded cards don’t include specific benefits, but may alert cardholders to sales in advance.
Some companies push their branded cards, particularly around the holidays, as an alternative to layaway. Although this can be tempting, it’s better to make the decision to get your store credit card when you’re not feeling the pressure to overspend for the holidays.
A department store card can be one way to help rebuild credit, but it does present limitations. You can generally only use the card to make purchases with the company that issued it, so it’s not as useful as some other credit cards for bad credit.
These branded credit cards function in the same way that standard credit cards do. You typically have a credit limit and the option to pay in full at a later date or pay over time. Retail credit cards are possibly the closest ancestors of modern credit cards, in terms of how they work: offering customers the ability to pay for purchases over time with a set interest rate and payment schedule.
Department store cards come in a few varieties and offer different benefits. Big Box credit cards, such as the Target Circle™ Card, offer a percentage of your purchase balance as cash back. The Target Circle™ Card offers this rebate right at the register.
As with all credit cards, a department store credit card includes an interest rate. That’s why you should choose the card you get carefully; high interest rates can make the amount you pay over time much higher than the purchase price.
How Do I Apply for a Store Card?
If you have bad credit, applying for a department store card is a lot like applying for a traditional credit card. In most cases, you’ll fill out an application either online or in-store.
The application will require that you submit details like your name, address, Social Security number, and other details that allow the company to check your credit report with each credit bureau.
Most department store cards use banks, such as Comenity Bank or Synchrony Bank, to provide your credit limit. These banks usually have limited functions outside of providing credit lines for different card and loan products.
Store credit cards often come with fast approval decisions. If you apply in-store, you may find out right at the register. Online applications are usually quick as well, though in some cases you may need to wait about a week for a response.
Some stores also offer an instant card number option, which allows you to charge your first purchase as soon as you’re approved. In other cases, you will have to wait to receive your physical card.
What Credit Score Is Needed For Department Store Cards?
Credit score requirements for department store credit cards differ. Most require at least fair credit to get approved.
However, the specific credit score required depends on the store you’re applying for a card with.
Some store cards are known for being more accessible than others. For instance, the Target Circle™ Card tends to have higher approval rates compared to cards from upscale department stores, but specific minimum credit score requirements remain undisclosed.
Here’s a look at the credit score ranges for both FICO and VantageScore:
| FICO Score Categories | Score Range | VantageScore Categories | Score Range |
|---|---|---|---|
| Exceptional | 800-850 | Excellent | 781-850 |
| Very Good | 740-799 | Good | 661-780 |
| Good | 670-739 | Fair | 601-660 |
| Fair | 580-669 | Poor | 500-600 |
| Poor | Below 580 | Very Poor | 300-499 |
It’s also true that beyond credit history itself, different factors in your credit report can impact whether your application is approved. Specific issues like late payments, excessive debt, too much credit utilization, and other negative marks on your credit report can be the determining factor.
The exact score needed for approval can vary, but it’s wise to focus on improving your score by using your card wisely.
Do Department Store Cards Impact Your Credit?
Department store credit cards can affect your credit because most report to the major credit bureaus. That can help or hurt, depending on how you manage the account and whether you pay on time, which is why one of these cards can support your credit-building efforts.
Payment history is the biggest factor in both your FICO and VantageScore:
| FICO Score Factors | VantageScore 4.0 Factors |
|---|---|
| Payment History: 35% | Payment History: 41% |
| Amounts Owed: 30% | Utilization: 20% |
| Credit History: 15% | Age/Credit Mix: 20% |
| Credit Mix: 10% | New Credit: 11% |
| New Credit: 10% | Balance: 6% |
| Only uses five factors | Available Credit: 2% |
But the impact on your credit can go both ways. Negative behaviors with department store cards, such as paying late or maxing out your available credit limit, can add more negative marks to your credit report and lower your score.
To avoid hurting your credit, make sure to pay your bills on time and keep your credit utilization under 30%. Good behaviors will help you build credit over time.
Spend with the Right Card to Build Your Credit Score
Many store cards advertise appealing rewards, but they’re often closed-loop cards with limited places to use them and high APRs. If your credit isn’t perfect, you may feel boxed in. The good news is that you aren’t limited to a single store or brand, no matter your credit score.
Open-loop credit cards offer a great chance for those with bad credit to enjoy special savings while also building their credit score when used wisely. If you consistently pay on time and gradually reduce your debt, you’ll likely see your credit score improve, opening up even more credit card options for you.
