Can You Use Your Store Cards Anywhere?

December 8, 2016, Written By Jason Steele

Have you been presented with a store credit card application recently? Sometimes, it feels like it is difficult to make a purchase without being offered one. Typically, the best offers come with a one-time discount on your purchases that day, along with enrollment in the store’s loyalty program. In addition, these store credit cards will offer customers coupons and promotions throughout the year. But when you are considering a store credit card, it can be hard to figure out if it can only be used at the store, or if it can be used anywhere.

Store cards versus co-branded cards

Originally, store credit cards were just an easy way of carrying a tab with a particular merchant. The old practice of carrying a tab simply meant the merchant would record a customer’s purchases, and ask for payment later. This is the most basic form of credit.

Later, stores gave customers some sort of tangible item to identify themselves, so that not just anyone could walk out with something by just saying “Put it on my tab.”  This ultimately evolved into the plastic store cards we use today. Eventually, some stores joined together into networks that used the same cards, administered by a bank, to offer credit to its customers.

Today, there are two types of store cards, although both are offered in partnership with banks. A standard store credit card can only be used at the store that issues it, typically along with other brands within the same corporation, and its online stores. For example, the Walmart store card can only be used at Walmart, Sam’s Club, and at Walmart.com.

But Walmart and other stores also offer co-branded credit cards that are part of larger payment networks such as Visa and Mastercard. When you have a store credit card with the logo of a payment network on it, then you can use it anywhere that accepts any card that is part of that payment network.

Usually, a store will display the logos of the credit card payment networks that it accepts on its front door and by its cash registers. Therefore, if you have a Walmart credit card that is part of the Mastercard payment network, you can use that card at any merchant that accepts Mastercard, not just Walmart.

Advantages and disadvantages of store cards

When a cashier asks you to sign up for a store credit card, he or she will be quick to point out the advantages of the card including coupons, discounts, and rewards in its loyalty program. Another advantage is that store credit cards generally require less credit history and a lower credit score to be approved.

On the other hand, having a card that can only be used at a single store is very limiting. For example, you might find a better deal elsewhere. In fact, one of the reasons stores heavily promote their cards is to encourage customers to return, and to send them marketing material. Finally, store credit cards will usually have higher interest rates and fees than credit cards issued by banks that aren’t co-branded with a particular merchant.

Pros and cons of co-branded credit cards

A store card that is also part of a larger payment network such as Visa or Mastercard can have many of the same advantages of a store card that is not. You can receive similar discounts, coupons, and promotions, but also have the ability to use the card anywhere that accepts cards from the same payment network. However, most stores will offer additional rewards for purchases made with the co-branded retailer.

A store card that is part of a payment network may also offer more competitive interest rates and lower fees than a pure store card that can’t be used elsewhere. However, it will usually have higher interest rates than the most competitive credit cards offered by banks and credit unions that aren’t co-branded with a retailer.

What should you do?

You don’t want to sign up for every store credit card you are offered, as that will result in an infinite number of cards. Instead, you should only consider the cards offered by the stores that you visit the most. Of those stores, you might only want to consider the cards that offer the most rewards and the cards that are part of a larger payment network. Unless you are spending a very large percentage of your income at a particular store, it won’t make sense to have credit card that is not part of a larger payment network and can only be used at that store.

However, those who are new to credit may find that a store credit card is a good way to build their credit history, even if it can’t be used elsewhere. When you look at the advantages and disadvantages of both types of cards, you can find the one that makes the most sense for your needs.



The information contained within this article was accurate as of December 8, 2016. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Jason Steele

Jason Steele is freelance journalist and an expert on the credit card industry. He contributes to several of the top personal finance sites, and his work is syndicated to mainstream outlets such as MSN Money, Yahoo! Finance, and Business Insider.

View all posts by Jason Steele