What store credit cards are worth getting?

Deals abound, but you can also make very expensive mistakes.

At the exit of Home Depot, Old Navy, or pretty much any national chain store, there’s a good chance the cashier will try to convince you to sign up for their store’s credit card . Great discounts on the first purchase! Rebate Offers! Special financing conditions! No annual fees! You can use it everywhere!

Think twice… and then think again. A survey conducted by Compare-Cards in September found that 56% of shoppers who open store credit card accounts regret it. One reason: Interest rates are high — nearly 5% higher, on average, than those on general -use credit cards , according to a new survey by CreditCards.com. According to the survey, 26 of the 28 highest-interest credit cards were store-only cards.

And those interest rates can be very damaging when combined with special interest-free financing offers. “If you don’t pay the opening balance in full before the promotional period ends, you’ll have to pay interest on the entire opening balance,” explains Nathan Grant, senior credit industry analyst at Credit Card Insider. For example, you open a store credit card account to buy a $1,000 refrigerator and pay off the balance without interest in 12 months. If a year later you’ve paid only $975, you could have an interest charge of almost $300 on your next bill.

However, if you pay your balance in full on time, a store credit card can save you money and give you attractive incentives. And store credit cards with bad credit can be much easier to get than regular ones, which are becoming more selective due to the financial fallout from the pandemic , according to Ted Rossman, an analyst at CreditCards.com.

To make my list of the best store credit cards, I interviewed Rossman, Grant, and Benét Wilson, credit card editors for the Points Guy website, for their top recommendations. But the best card for you depends on where you usually shop. If you’re considering a card that’s not on this list, use the information here to compare the benefits and decide if the incentives are worth it. Some cards can only be used in that particular store. Others are co-branded credit cards issued by Visa, Mastercard, American Express, or Discover, meaning you can use them at any merchant that accepts that brand of card. Rules for earning and redeeming rewards vary; in the case of certain cards,

Amazon Prime Rewards Visa Signature Card

Top benefits:  $100 sign-up bonus, 5% rebates at Amazon.com and Whole Foods Market; extended warranty coverage; travel insurance; does not charge fees for international transactions. If you’re a frequent Amazon shopper, it’s hard to find a better deal.

Here’s what you should know:  Amazon Prime membership required , currently $119/year. (Non-members can apply for another card with different benefits.) You can redeem your points for Amazon credits or for cash back or gift cards through Chase Bank.

Costco Anywhere Visa Card

Top benefits:  4% cash back on up to $7,000 in gas at Costco and other eligible gas stations, 3% at restaurants and on eligible trips, 2% at Costco and Costco.com; extended warranty coverage.

Here’s what to know:  Costco membership is required (currently, membership costs a minimum of $60 a year). Your reward certificate, redeemable for cash or Costco purchases, is issued annually after your statement closes for the month of February.

Lowe’s Advantage Card

Main benefits:  5% discount on eligible purchases and 20% (up to a maximum of $100) on your first purchase. (Discounts cannot be combined with other rebates or used for services, gift cards, or on certain brands, including Bosch and Monogram.)

Here’s what you should know:  You can only use the card at Lowe’s. It has a high interest rate (27%).

AARP Money Map™ helps you take back control of your finances. 

RedCard from Target

Key Benefits:  5% off all eligible purchases in stores and online, including clearance and sale items, as well as specialty gift cards; free standard or two-day shipping on target.com; 30 additional days for returns and exchanges; 10% off at hotels.com, and at Target on your anniversary (if you’re signed up to receive emails from Target).

Please note:  You can only use this card at Target. The 5% discount does not include prescription drugs. Target.com orders delivered by Shipt and some specific products may have shipping charges.

Walmart Rewards MasterCard

Main benefits:  5% discount at walmart.com, including takeout and delivery orders; 2% cash back for purchases at Walmart stores .

Here’s what to know:  You can get 5% cash back in stores for the 12 months you have the card if you use it with the Walmart Pay mobile app. If you don’t qualify for the co-branded card, Walmart also offers its own high-interest rate credit card; can be used only at Walmart and Sam’s Club.

Lisa Lee Freeman, a consumer and shopping expert, was the founder and managing editor of Consumer Reports’ ShopSmart magazine and an investigative reporter for The Dr. Oz Show .

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