The debate between store credit cards and cash-back credit cards has been ongoing for years. On one hand, store credit cards offer immediate savings and perks for loyal customers. On the other hand, cash-back credit cards provide flexibility and rewards that can be redeemed anywhere. So, which is the better option?
When considering whether to get a store credit card, it’s important to understand what they are. Store credit cards are cards offered by specific retailers, and they can usually only be used at that specific store. However, there are also open-loop store credit cards that can be used anywhere like regular credit cards. The question then becomes, how much will the store credit card benefit you in the long run?
Let’s take a look at four popular store credit cards and how they stack up against four cash-back credit cards:
1. Sephora Visa Credit Card vs. Capital One SavorOne Cash Rewards Credit Card:
The Sephora Visa credit card offers a 25% discount on your first purchase and earns the highest bonus on Sephora purchases. However, if you spend more on food than at Sephora, the Capital One SavorOne card is a better option with its larger welcome bonus and higher cash-back earning rate.
2. Apple Card vs. Blue Cash Everyday Card from American Express:
The Apple Card may seem like a good choice for Apple purchases, but the Blue Cash Everyday card offers a $200 cash back welcome bonus and 3% cash back at U.S. supermarkets, online retail purchases, and gas stations. Plus, it provides purchase protection, which the Apple Card lacks.
3. Prime Visa Card vs. Chase Freedom Flex:
While the Prime Visa card offers 5% cash back at Amazon, Whole Foods, and more, the Chase Freedom Flex card offers a $200 cash back welcome bonus and 5% cash back on rotating quarterly categories. The flexibility of the Chase Freedom Flex card makes it a stronger choice.
4. Target REDcard vs. Citi Double Cash Card:
The Target REDcard offers a 5% discount on Target purchases and free shipping, but the Citi Double Cash card offers 2% cash back on all purchases. If you shop at Target frequently, the REDcard may be worth it, but for overall cash back rewards, the Citi Double Cash card is better.
In conclusion, while store credit cards may offer immediate savings and perks, cash-back credit cards are generally a better long-term option. Cash-back credit cards provide flexibility, higher rewards rates, and the ability to redeem rewards anywhere. It’s important to analyze your spending habits and determine which card will benefit you the most in the long run.