Store Credit Cards vs. Traditional Credit Cards

Thinking about applying for a credit card? If so, then you might be wondering how traditional credit cards stack up against store credit cards. Although they look alike, there are some important differences to know. Getting familiar with these can affect how you spend, the rewards you earn, and perhaps even your credit score. 

Flexibility: Where Can You Use It?  

One of the biggest differences between traditional credit cards and store cards is where you can use them.  

Retail Credit Cards: 

• Typically limited to purchases at a specific store or group of stores 
• Can usually be used online, but only at that store’s website 

 Traditional Credit Cards: 

• Accepted nearly everywhere (online, in-store, and even abroad) 
• Can be used for everyday purchases like gas, groceries, streaming services, and more 

If you mostly shop at one store, a store card might work. But if you want to use your card for everyday purchases, a traditional card is probably a better fit. For example, with any Arkansas Federal Credit Union credit card you can shop locally or anywhere in the world where Mastercard® is accepted.  

Interest Rates: What Will You Pay? 

No matter which type of card you choose, if you carry a balance, you’ll pay interest. Store cards often have higher rates, sometimes over 25%. Traditional cards generally offer better rates, especially if you have good credit. Because rates can make a big difference, it’s always a good idea to compare APRs (Annual Percentage Rates) carefully before applying. 

Retail Credit Cards: 

• Tend to have higher interest rates than traditional cards 

• May not be worth it if you don’t pay off your balance every month, even if you shop there often 

Traditional Credit Cards: 

• Generally, offer lower, more competitive rates  

• Credit union cards, like the ones from Arkansas Federal, often feature low rates, so you can shop with confidence and save over time 

Quick Comparison: Interest Rates 

Credit Card Type	Typical APR Range	Notes
Store Credit Card	25% – 30% (or more)	Higher rates, especially if promotional offer ends
Traditional Credit Card	15% – 20% (varies by credit worthiness)	Often better rates than store cards, but still higher
Credit Cards from Financial Institutions, Like AFCU	10% – 18% (varies by credit worthiness)	Often, the lowest rates available

Rewards and Perks: What Do You Get?

Many store credit cards offer loyalty perks, but they typically only apply to purchases made at that store. While traditional cards allow you to use them and earn just about anywhere.  

Store Credit Cards May Offer: 

• Discounts on purchases 
• Special sales or coupons 
• Loyalty points for shopping at that specific retailer  

Traditional Credit Cards (Like AFCUs) May Offer: 

• Earn points or cash back on all types of purchases 
• Rewards can be used in more ways, at more places 

For example, with Arkansas Federal’s Cash Back Credit Card, you can earn 2% cash back on every purchase,¹ with no categories to track, no limits, and no complicated rules. Just straightforward cash back.  

What About Those Store Sign-Up Offers? 

You might hear offers like “Save 20% today if you open our store card.” When you’re making a bigger purchase, that offer might sound pretty appealing. But that short-term discount could cost you more in the long run, as many store cards come with:  

• Higher interest rates 
• Lower credit limits 
• Limited rewards that only apply to that store 
• A temporary hit to your credit score from the required credit pull 

If you carry a balance or don’t shop there often, the discount might not save you money over time. 

Credit Limits: How Much Can You Spend?  

Your credit limit is the most you can spend on your card, and it varies based on your credit profile and the type of card you have. Store credit cards generally have lower limits, sometimes under $1,000, which can be tight if you need to cover bigger expenses or emergencies. 

That’s why a traditional credit card, such as one from Arkansas Federal, can help. With higher spending limits (depending on what you qualify for), paying for surprises or bigger buys is easier.

So…Which One is Right for You?

If you only shop at one store and want a quick discount or perk, a retail card might work for you. But for most people, a traditional credit card is the better choice since it offers: 

• More flexibility 
• Broader use 
• Lower interest rates 
• Higher limits 
• More rewarding perks 

Apply Today and Start Spending Smarter 

Apply for a credit card with Arkansas Federal today. We have several options, including:  

• The Cash Back Card where you can earn 2% on every single purchase¹ with no annual fee, no hoops, and no hassle. 
• The Everyday Low Rate Card offers a consistently low interest rate with no annual fee, great for carrying a balance. 
• The Secure Card is another great option if you want to build or rebuild your credit.  

No matter which Arkansas Federal card you go with, you’ll enjoy no annual fee and none of the usual hassle. Every card also comes with built-in fraud protection, mobile wallet compatibility, 24/7 account access, free credit monitoring, and more.