Tempura / E+ / Getty Images

Should you get a retail credit card during the pandemic?

A retail card can help you earn cash back on groceries, delivery charges and more. But beware high APRs and deferred interest deals


A retail card can help you offset extra spending on groceries and delivery charges with cash back, and it may be a wise choice if you’re shelling out more at one store now. But it’s important to understand the downsides of retail cards before you sign up.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Many Americans are spending more time at home and are low on cash right now.

A shiny new retail card may look like a good way to save on groceries or buy stuff to spruce up your space.

But it’s smart to think carefully before opening a retail card so you don’t end up deep in debt. Almost half of Americans (47%) have credit card debt now, and one in four (23%) of those have added more debt during the pandemic, a recent CreditCards.com coronavirus debt survey found. Half worry about their debt and 15% are “very stressed.”

But there are good reasons to open a retail card at this time. Many people are spending more on groceries due to food price increases, delivery costs and a need to stock up on toilet paper, hand sanitizer and other goods.

A retail card can help you offset that extra spending with cash back, and may be a wise choice if you find you’re shelling out a lot more at one store now – for example, ordering everything on Amazon or getting grocery pickup at Walmart.

“They can be a good way to get benefits from a brand you’re already loyal to,” Luis Rosa, CFP and founder of Build a Better Financial Future, says.

See related: How cash back credit cards work

Co-branded vs. store-only retail cards

A co-branded retail card offers the best of two worlds: a large retailer partnering with a major credit card issuer. These cards work just like any other credit card, and can be used at any merchant that accepts that type of card. In contrast, store-only cards are much less flexible and can be used only at the store that issues the card. Examples of store-only cards include the Express card, the Pottery Barn credit card and the Target RedCard credit card.

Here are some examples of co-branded cards, including a few of our picks for best retail credit cards in 2020:

Amazon Prime Rewards Visa Signature Card*

This Chase cash back card offers a $100 Amazon gift card when you get approved, then 5% back at Amazon.com and Whole Foods Market, 2% back at restaurants, gas stations and drugstores and 1% back on other purchases.

Who it’s good for: Amazon Prime members who have stepped up Amazon.com ordering to avoid stores during the pandemic. It’s extra valuable if you also get your groceries at Whole Foods.

Costco Anywhere Visa® Card by Citi

This cash back card offers 4% on eligible gas (on up to $7,000 in purchases annually, then 1%), 3% on eligible travel and restaurants, 2% on other purchases from Costco and Costco.com and 1% on everything else.

Who it’s good for: Regular Costco shoppers who want to be rewarded for stocking up on paper products and food during the pandemic.

Capital One Walmart Rewards® Mastercard®

This cash back card gives you 5% cash back on Walmart.com purchases, including grocery pickup and delivery; 2% back on purchases inside Walmart stores and fuel stations, on travel and at restaurants; and 1% back on everything else. During the first 12 months, you can also earn 5% cash back on in-store Walmart purchases if you use the card with Walmart Pay.

Who it’s good for: Shoppers who use Walmart grocery delivery or pickup to make food shopping safer during the pandemic.

See related: Are retail store cards worth it?

The upsides of getting a retail card

Depending on your lifestyle, shopping habits and goals, you may find several big benefits to getting a co-branded retail credit card. For example:

  • It may be a snap to get approved. Retail cards, especially store charge cards, have always been among the easiest credit cards to get, credit card expert Jason Steele says. “That can be a plus if you have had credit problems or are new to credit,” he says. But it’s no guarantee. Card issuers have tightened up on lending during the pandemic.
  • Can help you build credit. If you want to use a retail card for credit building, charge only what you can afford and set up auto payments so you never miss a due date. Consider using the card for a small, recurring charge like a Netflix or Spotify subscription, and nothing else. “That’s a nice little trick for building credit,” Steele says.
  • May serve as a tool to limit spending. If you’re trying to build credit but have trouble overspending, it may make sense to get a store-specific card to limit your spending. Try to get one from a store where you shop occasionally but won’t be tempted too spend too much. Just make sure the card issuer reports to the major credit bureaus.

The downsides of getting a retail card

But retail cards also have several disadvantages you may want to consider before you apply. For example:

  • High interest can break the bank. The average APR was 27.52% for store-only card offers and 23.39% for new co-branded cards in the 2019 CreditCards.com retail card survey. That’s comparable to the average APR for a credit card for bad credit, and far higher than the 15.82% average APR for a rewards card. You could get into financial trouble and end up getting gouged if you carry a balance on a retail card. “The ultimate cost of your goods could be 20, 30, 40% more than what appeared on the receipt,” Steele says. 
  • Intro offers have a dark side. Co-branded cards typically don’t offer deferred interest deals, but some store-specific ones do. For example, the Home Depot Consumer Credit Card is offering six months of interest-free financing on purchases of $299 or more. If you don’t pay the entire balance by the date your deal ends, you owe high interest on the balance starting from the purchase date. “If you’re a day late or a penny short, then you owe interest from day one,” Steele says.
  • Some cards offer skimpy rewards. When compared with other credit cards, retail cards may not offer the most bang for your buck in terms of rewards. “But there are some good exceptions,” Steele says. For example, both the Amazon and the Walmart credit cards offer 5% back on some purchases.

See related: Which is the best card to use on Amazon purchases? 

Tips for getting a retail card

Retail cards can definitely be a mixed bag. Here are five top tips for getting and using a retail card to maximum benefit during the pandemic:

1. Make sure you’re getting a good deal

Comparison shop before you choose a retail card. If a merchant’s prices are higher than another store, that cuts into your cash back.

“Always look at the prices first,” Steele says.

And don’t spend more just to earn cash back or points.

“If you start chasing rewards, it can get really out of hand,” Rosa says.

2. Don’t apply if you’re in dire financial straits

A retail credit card may be the wrong tool to tide you over if you lost your job or had hours cut due to the pandemic and want to float purchases of food and other essentials. You’ll probably end up carrying a balance, and the high APR can make your situation worse, says Ben Watson, CPA and virtual CFO at DollarSprout.

“A retail card is a poor choice if you’ve lost income,” he says.

3. Check your existing cards

Before you open a new retail card to get extra rewards for your spending on groceries and household goods, check and compare your existing cards. For example, both Amex and Chase have increased rewards for grocery store spending on some cards during the pandemic. It may not make sense to get a new card if you can get the same level of rewards on a card already in your wallet.

4. Treat it like a debit card

When you’re buying everyday items like groceries and gas on credit, you can get tricked into thinking you have more money in the bank than you do, Rosa says. So consider making a payment after each shopping trip rather than waiting a month to get your bill.

“As soon as you get home from the store, log in and make that payment,” Rosa says.

5. Get cards from the stores where you shop the most

And finally, don’t open a bunch of retail cards because that can ding your credit.

“Limit it to the one or two stores where you shop most often, and make sure you’re getting a good deal,” Steele says.

*All information about the Amazon Prime Rewards Visa Signature has been collected independently by CreditCards.com and has not been reviewed by the issuer. 

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Card advice

Why the Upgrade Card is perfect for financing your purchases

The Upgrade Visa® Card with Cash Rewards can help you pay off large purchases while avoiding deferred interest promotions. If you have excellent credit, you may even end up with a lower APR than is typically offered by traditional credit cards.

See more stories
Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more