Store credit cards are known as co-branded cards offered by grocery or department stores. These cards are backed by a financial institution which supplies and manages the credit cards on behalf of the store.
A combination of high reward points and ongoing discounts or benefits unique to the store are what make store credit cards an attractive choice.
For larger families or people who purchase large quantities of groceries or white goods, using a store credit card can really be worth it. Plus, if most of your purchases consist of store-branded products, it can earn you bonus reward points too.
Store credit cards come in different forms such as rewards, low rates, low annual fees, and sometimes with special promotions.
Common store credit cards available in Australia
There are four common store credit cards that are available in Australia. These are grocery chains Woolworths (currently pause on new applications), Coles and department chain David Jones and Myer (currently pause on new applications). All supplying different credit card types to suit a range of customers.
In Australia, there are very few store credit cards, whereas in countries like Canada and USA there are several store or co-branded cards. For example, we don't currently have Amazon or Apple credit cards yet available here in Australia.
On Kredmo, you can simply compare store credit cards by multi-selecting the store providers with types rewards, low interest rate, no annual fee and more.
Differences between a store credit card and a bank credit card
A store credit card is similar to any standard credit card you find at a bank. Where they differ is mostly in their features and promotions offered which are unique to the store.
Stores generally offer the customer to redeem cashback or credits to their store in exchange for reward points. For example, Woolworths provides $10 off shopping for every 4000 points collected and a 10% discount each month off on one customer's shopping trip.
Whereas a standard credit card can offer the same redemptions but to a broader-based of partners.
A traditional rewards credit card from a bank will usually earn points on spending, but not necessarily have regular discounts offers or cash/credit back. However, there are banks that allow reward points to be traded for cash back or frequent flyer points. Banks do tend to offer broader benefits like purchase protection, refund protection and extended warranty, that some stores may not always provide.
Frequent flyer point credit cards such as those Qantas or Velocity however do operate more like a store credit card. Offering benefits specific to traveling and discounts to loyal customers who spend with them.
Store credit cards do not really offer premium credit cards. If you’re looking for a credit card with a vast amount of benefits, such as discounts at hotels, many airport perks then you won’t find this level of card from store cards.
Store card annual fees are generally from low to medium in cost. A traditional reward points credit card can have on average an annual fee between $200 to $300 p.a. While the average annual fee for a store credit card is approximately $100 p.a.
Are store credit cards easier to get approved?
Yes, sometimes it can be easier to get approved.
It really depends on the contractual agreement between the store and the provider. In some contracts, the bank will agree to maintain a minimum approval rate for a store's credit card applications. This is why at times it may seem easier to get a store card approved.
However, if a store credit card is generally easier to get approved, this can usually mean that lower limits are given. Overtime if a customer's repayment history is very good, it can be possible to get a credit limit increase.
Can I use my store credit card outside the store?
Yes, you can use it outside the store.
Though they are store-branded, these credit cards are still part of the payment network. Across the well-known payment networks, Visa, Mastercard or American Express.
The only downside to using it outside the store is getting fewer points are earned on those purchases. But at least you have the flexibility to use the card as you wish as long as the payment network supports it.
Mobile payment App options
Mobile payment applications are widely available in Australia. Stores do generally have popular mobile payment apps compatible with their credit cards.
For grocery stores, currently Coles credit cards are compatible with Coles Mobile Wallet, Apple Pay and Samsung Pay.
But Woolworths credit cards are useable with Apple Pay.
Department store David Jones credit cards can be used with Apple Pay, Samsung Pay and Google Pay.
While Myers is compatible with Apple Pay and Google Pay.