Retailer-Specific Credit Cards

Every day, more and more national stores choose to offer their own branded credit card and reward program, and many of you have probably been approached and asked to apply. You have seen the cards at President’s Choice, Canadian Tire, Sobeys, Costco, Staples, Shoppers Drug Mart, WalMart, Petro Canada and other large retailers.

So should you apply and accept their offer? Wallet Savvy is going to help you understand how to make the right decision!

It is first important to understand why the stores offer their own credit cards and why many start introducing them. As you have correctly guessed – they want to see you more often at their stores and encourage you to spend your money there. What’s more, retailers get to see your purchases and spending habits as you use their card(s). Then, armed with this powerful information, they can send personalized offers inviting you to come back and shop for more.

Here are key 5 points for you to consider about specialty cards:

1 - How Much Do You Spend in This Particular Store Per Year?

If you are looking at the card from a rewardspoint-of-view, your spending will determine your rewards. Hence, if you are spending just a few dollars here and there in that particular store, logic suggests that you should not take the card. However, if you do all of your grocery shopping at one particular store, it may be worth considering the offer.

Let Wallet Savvy help you choose the right card that will make a difference in your wallet (Link).

2 – Your Personal Credit Score

The great news about specialty cards is that you do not need a very high score to get a credit card, and 99% of the time, there is no annual fee.  So, if you are new to Canada, if your credit score is not great, or if you are simply trying to rebuild your credit score (read our article on 5 steps to rebuilding your bad credit -  Link) then one of these cards can springboard you to success.

3 – How Many Credit Cards are in Your Wallet Now?

It is important to know that having multiple cards is not a good way to go about building a good credit score. In fact, your credit score will start declining as you add more cards to your collection even if all of them have a $0 balance and are in good standing order. Since it is fairly easy to apply for specialty cards, you may start collecting them – but please be aware that you will do more harm than good.

4 – Your Purchase

Many furniture stores or electronic stores offer additional extended warranties or additional one-time cash back offers that can give you added peace of mind or a great benefit. If you are purchasing major appliances or big ticket items such as furniture, you may enjoy some one-time benefits by purchasing the items with the store’s credit card. However, always remember that if you have too many cards in your wallet, applying for another one will start damaging your credit score. In such cases, just voluntarily close one or two cards that you are not using at all (make sure to redeem all accumulated points prior to closing, if applicable) and take advantage of the benefits, while increasing your credit score even further.

5 - The Fine Print and Interest Rate

Many stores concentrate on the welcome offer(s) but sometimes forget to mention that the interest on their cards is 28% or higher. If you carry balances (even small ones), no rewards offered will make up for the interest rate charges that you will have to pay.  Always ask for the disclosure statement before applying, and use the Wallet Savvy tools to help you identify the right cards for you.

As you can see, specialty cards can benefit some more than others - it all depends on individual circumstances. The great news is that you are safe with Wallet Savvy – we will not recommend any cards unless they are absolutely the best for you. We are big believers in the power of knowledge - the more you know about credit cards, the better decisions you, your family and friends can make. Use our tool to see what specialty cards are right for you.