Credit Card vs. Retail Card: The Key Differences

Every time you shop, whether online or in a retail store, you’re probably asked to sign up for a retail credit card. A retail credit card is often offered in the checkout line where signing up and getting approved is easy and done within minutes. On the other hand, a traditional credit card has a few more steps to get approved and offers more perks.


Retail credit cards are easy to obtain, but you can only use it at that specific retail store. For example, if you get a retail card from Target, you can only use it at Target. If you get a retail card from Menards, you can only use it at Menards. This limits your spending to these places. With a traditional credit card, you can go anywhere, anytime (wherever the card is accepted) to make purchases.


Obviously, it’s always best to carry as little of a balance as possible on your credit card. Yet, if you’re going to carry a balance, make sure you have the lowest interest rate possible. Between a traditional credit card and retail card, you’re more likely to have a lower interest rate on the traditional credit card. Retail credit cards offer higher percentages, so your balance could add up quickly if you aren’t paying down the balance every month.


Exclusive Deals. Becoming a retail credit card user opens you up to deals and special promotions. There might even be a promotion running when you sign up for the card. Deals usually include receiving a discount or coupon for the store the card is linked to.

Loyalty Program. Most retailers offer loyalty programs that reward customers for continuing to shop at their location. Retail cards and loyalty programs work well together. Some loyalty programs let you earn bonus point when you use your retail card. So, while you’re swiping your credit card, you can earn points and redeem even bigger savings!

Cash Back. This isn’t as viable through a retail credit card; it is an option for traditional credit cards. For shopping and using your credit card, you can earn a percentage of cash back from your purchases. If you’re using your credit cards a lot, especially for bigger purchases, you can earn cash back fast. Some traditional credit card even offer rewards such as hotel discounts and air fare miles. Something to consider if you choose a traditional credit card.

At the end of the day, the benefit to both options is being able to purchase items now and pay for them later. Just remember: both types of credit cards require financial responsibility, so always at least pay the minimum on your balance so it doesn’t affect your credit score.