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Store Cards with the Best Rewards

Note: Consumer Reports has no relationship with the advertisers on this site.

Pitches to save an additional 10% to 15% on a day's purchases by opening a store credit card account can sound pretty appealing. You might also be attracted by the cards' additional benefits, such as access to special sales or discount coupons.

But store credit cards have some significant drawbacks. And opening up too many accounts can lower your credit score.

To help you decide when to say yes to a store card and when to decline, we've outlined how the programs generally work and their pros and cons. We also looked at programs offered by some of the largest retailers to find the most generous ones. You can find the details in Best store rewards cards.

Know the different types

Retailers usually offer one of three types of cards. Many stores offer a co-branded credit card, which is imprinted with an American Express, Discover, MasterCard, or Visa logo. Such cards typically allow you to earn reward points when you shop with that particular retailer and when you use it at other stores that accept the card's logo.

Other retailers issue store cards that don't carry a credit-card logo and can only be used in their stores. Some large chains, including Bloomingdale's, Gap/Banana Republic, and Macy's, offer both their own store cards and co-branded ones.

The points you earn on co-branded or store cards are based on how much you spend, just like other reward programs. Points can be redeemed for gift cards, store coupons, or discounts on travel or restaurant meals. A few card programs, like the ones run by Amazon, Costco, and Walmart, pay you cash rewards. And as we noted last month, this fall shoppers using a Target REDcard (its store card or co-branded Visa card) will receive 5% off purchases when they check out.

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