“If that is the case, and you still can qualify for a store card, you can use a perfect payment history to build your credit.”
Why are store credit cards easy to get?
Store credit cards tend to have looser credit requirements than most rewards credit cards, and the main reason for that is because retailers benefit from people signing up for their cards.
Having a store credit card encourages people to shop at that store more often, which helps the retailer’s bottom line. And if you happen to pay interest on your card, even better.
Of course, you don’t have to fall for these tactics. You can simply use a store card to build your credit and avoid interest and temptations to spend along the way.
3 tips on how to get approved for store credit cards
If you’ve been denied a credit card in the past because of your credit or you’re simply not sure if you should apply, we’ve put together some tips to help you learn how to get approved for store credit cards.
1. Take a look at your credit score
The first thing you need to do is figure out where you stand with your credit. If you’ve never had a credit card or loan in the past, you may not have a credit score yet. But it’s wise to check anyway.
Here are a few places where you can get access to your credit score, either for a small fee or for free:
Click here for a comprehensive list of the best credit monitoring tools.
To give you an idea of what to expect, here are the different ranges for a FICO credit score.
If your credit score is fair or better, you should have a good chance of getting approved. If your score is in the poor range, you should still have a chance, but having an otherwise strong financial profile can help.
2. Pay down debt
So, it may help if you throw some extra cash at your debt. “If you earn more or have less debt, card issuers think you are in a better position to manage the card well and pay off your balances,” he adds.
Start with your credit card debt, then focus on other consumer debt like auto loans, student loans, and personal loans. Banks are a little more understanding if you have mortgage debt, so that shouldn’t be a deal breaker.
As you pay down debt and lower your debt-to-income ratio — your monthly debt payments divided by your monthly gross income — then you’ll have a better chance of getting approved for a store credit card.
3. Maximize your income
While it’s not a good idea to lie about your income on your credit card application — it’s actually considered credit card fraud — it’s important to know what counts as income and what doesn’t.
Here’s a quick summary based on your age:
Ages 18 – 20
- Personal income
- Regular allowances
- Scholarships and grants
Ages 21 and up
- Personal income
- Regular allowances
- Scholarships and grants
- Income from a spouse or partner
- Trust fund distributions
- Retirement fund distributions
- Social Security income
Note that debt such as student or personal loans doesn’t count as income. But if you’re a student with no earned income or a stay-at-home parent, you still have options.
Other important questions related to store credit cards
To help you determine whether a store credit card is right for you, here’s a quick Q&A with some top relevant questions:
Do store credit cards hurt your credit?
Every time you apply for a credit card, the card issuer runs a hard inquiry on your credit report, which can knock a few points off your credit score. But as long as you don’t apply for multiple cards in a short period, the negative impact is negligible.
Can store credit cards help build credit?
If the card’s issuer reports your activity to all three credit bureaus, your positive account activity can help you establish a good credit history. Just be sure to use the card responsibly, keep your balance low, and make your payments on time each month.
Can you get a credit card with a 550 credit score?
It’s definitely possible to get a store credit card with a 550 credit score. Just remember the other factors that we mentioned — debt and income — as you apply.
Are there any instant approval department store credit cards?
There are in the sense that it typically takes less than a minute to get an approval But most credit card issuers will run a credit check before approving your application.
What are the best store credit cards to build credit?
The best store credit card for you will depend on where you shop most often. For example, it won’t make sense to get the Gap Visa credit card if you rarely buy clothes, let alone shop at Gap-branded stores.
That said, here are a few of our favorite store credit cards to check out:
- Amazon Store Card: You need to be an Amazon Prime member to get this card. It offers 5% cash back on all Amazon.com purchases, plus promotional financing on large purchases.
- Target REDcard: You’ll get an automatic 5% discount on most purchases at Target stores and Target.com.
- Gap Visa Card: Get a 5% rewards rate on purchases and Gap and Gap-branded stores, including Old Navy, Athletica, and Banana Republic. Get 1% back everywhere else.
- FingerHut Card: You can receive gifts, promotional deferral periods on payments as well as payment rewards for making payments on time.
- Costco Anywhere Visa Card: Get 1% cash back when you spend it anywhere that accepts VISA. Earn up to 4% for purchases in a bonus category.
- Best Buy Visa Card: With the My Best Buy Visa®, you’ll get 5% back in rewards on most Best Buy purchases. You’ll also get 2% back on dining and 1% back everywhere else. The card also runs promotional bonuses.
Should you apply for a store credit card?
Now that you know how to get approved for store credit cards, it’s time to decide if you should get one or not. If your credit score needs some help and you often shop at a specific retailer, it might be a good idea to get a store credit card from that retailer.
However, if you’re concerned about overspending, or you’ve had trouble with overspending on credit cards in the past, a store credit card could make it worse.
If you decide that a store credit card is right for you, check out the ones we listed and other top options before you apply.
It’s also a good idea to compare other types of credit cards as well to make sure you’re not missing anything. The more you know, the more confident you’ll be in choosing the right credit card for you.
Ben Luthi is a personal finance writer and a credit cards expert who loves helping consumers and business owners make better financial decisions. His work has been featured in Time, MarketWatch, Yahoo! Finance, U.S. News & World Report, CNBC, Success Magazine, USA Today, The Huffington Post and many more.