One of the subtle influences on your credit score is the type of credit account you have. For instance, while it doesn’t count that much, it makes a small difference whether you have a department store credit card or a major bank credit card. Normally, I fall firmly into the camp of not having a department store credit card. It seems pointless: The interest rates are often higher and there are rarely rewards programs.

But I began to change my mind as I helped my seven-year-old with back-to-school shopping this year. I realized that we buy almost all of the clothes for our family at one store. This store routinely offers anywhere between 15% and 30% off your purchase when you pay with the department store credit card. (I can get 20% off for applying!) Plus, once a certain yearly spending threshold is reached, there are different opportunities to get extra savings each year.

I began toting up how much I could save if I had this department store credit card. As long as I pay off the balance each month, it could be better than the rewards programs I have with other credit cards. After all, the card represents regular savings. With a rewards program, you have to accumulate thousands of points before you can even think of redeeming them. So you spend quite a bit of money trying to get rewards, when in some cases you could have an immediate discount that provides more value.

Of course, getting a department store credit card doesn’t always make sense. However, here are some reasons that may make it worth it to get a department store credit card:

  • You regularly shop at one store.
  • You would shop at this store even without the card or the discount.
  • There is a regular discount offered to card customers.
  • Your budget allows you to pay off the balance each month, without accruing interest.
  • Your receive special discounts and offers that you are likely to take advantage of.
  • The savings you receive outweigh the benefits you would get from a rewards program.

While you don’t want to fill your wallet with department store credit cards, it might be worth it to choose a card that provides distinct advantages to loyal customers — especially if you are already a loyal customer.


Miranda is a Freelance writer focusing on banking and personal finance.