By Barry Choi

Special to the Financial Independence Hub

Even as another holiday season has arrived and nearly gone, retailers are trying their best to get us to spend money at their stores. One way they hope to achieve this is by offering enticing rewards and promotions when you sign up for their store credit card. This is a great strategy for retailers, but it’s also potentially a good deal for you since store credit cards can help you pocket additional savings.

Since many people already have a credit card, does it make sense to sign up for a new store credit card? Like any other credit card, it really comes down to the pros and cons of the card and how it fits into your spending.

The pros of store credit cards

Instant welcome offers

Although the welcome offers that come with store credit cards aren’t as generous as some other cards out there, sometimes they’re worth paying attention to. For example, the Hudson’s Bay credit card gives you 10% off your first purchase. If you’re buying a big-ticket item, then it might be worth your while to sign up: especially if you shop from Hudson’s Bay on the regular card.

Unlike most credit cards, the savings offered by store credit-card promotions are also instant. You won’t have to wait several statement periods or spend a certain amount (i.e. $3,000 within three months) to access the offer.

• Great rewards for shopping in their stores

What’s really attractive about store credit cards is their enhanced in-store rewards. This, of course, is only relevant if you happen to shop at the retailer on a regular basis.

For example, with the Triangle Mastercard, you’ll earn 4% in Canadian Tire Money per dollar spent at Canadian Tire stores. There’s no other credit card out there that can beat that return at Canadian Tire, so if the iconic retailer is a regular part of your shopping routine, you could stand to save big with this store credit card.

PC Optimum is another popular retail loyalty program in Canada. If you were to apply for a PC Financial Mastercard, you could earn up to 30 PC Optimum points per dollar spent at Loblaws-owned grocery stores and up to 45 points per dollar at Shoppers Drug Mart: a 3% and 4.5% return respectively. Those earn rates add up to considerable savings on your grocery and pharmacy bills, even compared to what non-retail credit cards offer.

• Store credit cards are often easier to get

What’s also appealing about store credit cards is that they often have low income requirements and there’s usually no annual fee: so they’re easy to get and free to carry. The reason retailers do this is so you’ll be more inclined to apply. For example, the Costco credit card from Capital One has no annual fee and the application doesn’t list a minimum income requirement.

• Store credit cards often let you take advantage of unique financing options

Sometimes store credit cards offer special in-store benefits that can’t be ignored, such as Canadian Tire’s credit cards, which offer no interest financing up to 24 months that applies to qualifying purchases of $200 or more at participating stores.

Let’s say an emergency has come up and you’ve had to spend $600 at Canadian Tire. By taking advantage of the no-fee, no-interest financing, you’d only have to pay $25 a month for 24 months with no additional interest or fees. This is handy if you don’t have the funds available to pay off the purchase right away. Continue Reading…