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Sears Mastercard with Shop Your Way review

Sears Mastercard with Shop Your Way review

Published: November 15, 2017
Ratings Policy
No Annual Fee Rating:
3.1 rating
3.1 rating
3.1 / 5
Rewards Value: 4.0
Annual Percentage Rate: 0.0
Rewards Flexibility: 2.6
Features: 2.0

In a nutshell:

With a 5 percent bonus rate on gas purchases and a 3 percent bonus rate on groceries for the first 6 months of card ownership, the Sears Shop Your Way Mastercard offers one of the most valuable sign-up offers among no-annual-fee cards, though the rewards only apply to merchandise at participating stores, and the regular rewards rate is less than impressive.

Rewards Rate

  • 2:1 eligible purchases at Sears and Kmart
  • 1:1 all other purchases

Sign-up Bonus

  • $150 statement credit if you spend $2,000 in first 30 days
  • 5:1 eligible gas station purchases for 12 months
  • 3:1 eligible grocery store and restaurant purchases for 12 months
  • $10,000 limit on purchases for these categories combined; rate is 1:1 thereafter

Annual Fee
$0

Average Yearly Rewards Value ($1,325 monthly spend)
$312

APR
26.24%

Rewards Redemption
Pros

  • Can redeem any number of points
  • Limit on gas and grocery store bonus is fairly high
  • Can redeem points on the spot for eligible purchases at participating stores

Cons

  • Points expire after 12 months
  • Points only apply to purchases at participating stores
  • No cash back option
  • No options to transfer or pool rewards

Other Notable Features: Monthly savings and special offers at Sears, special financing in select categories, $0 fraud liability, extended warranty, price protection

Retail Rating:
3.7 rating
3.7 rating
3.7 / 5
Yearly Savings: 5.0
Annual Percentage Rate: 1.0
Rewards Flexibility: 4.0
Features: 3.0

In a nutshell:

Cardholders on the search for a retail card with a great gas bonus may appreciate the 5 percent rate that the Sears Shop Your Way MasterCard offers on gas purchases for the first 12 months, though the regular rewards rate is less than spectacular and the APR is very high.

Rewards Rate

  • 2:1 eligible purchases at Sears and Kmart
  • 1:1 all other purchases

Sign-up Offer

  • $150 statement credit if you spend $2,000 in first 30 days
  • 5:1 eligible gas station purchases for 12 months
  • 3:1 eligible grocery store and restaurant purchases for 12 months
  • $10,000 limit on purchases for these categories combined; rate is 1:1 thereafter

Annual Fee
$0

Average Yearly Savings ($1,325 monthly spend)
$312

APR
26.24%

Rewards Redemption
Pros

  • Can redeem any number of points
  • Limit on gas and grocery store bonus is fairly high
  • Can redeem points on the spot for eligible purchases at participating stores

Cons

  • Points expire after 12 months
  • Points only apply to purchases at participating stores
  • No cash back option
  • No options to transfer or pool rewards

Other Notable Features: Monthly savings and special offers at Sears, special financing in select categories, $0 fraud liability, extended warranty, price protection

Rewards Rating:
2.7 rating
2.7 rating
2.7 / 5
Rewards Value: 3.0
Annual Percentage Rate: 0.1
Rewards Flexibility: 2.6
Features: 2.0

In a nutshell:

New cardholders looking for a good discount on gas may spring for this card’s 5 percent introductory bonus on gas purchases. However, the card’s rewards program in general only makes sense for avid Sears shoppers, since it offers an overall low rewards rate, not to mention an exceptionally high APR that could ensnare unwary cardholders.

Rewards Rate

  • 2:1 eligible purchases at Sears and Kmart
  • 1:1 all other purchases

Sign-up Bonus

  • $150 statement credit if you spend $2,000 in first 30 days
  • 5:1 eligible gas station purchases for 12 months
  • 3:1 eligible grocery store and restaurant purchases for 12 months
  • $10,000 limit on purchases for these categories combined; rate is 1:1 thereafter

Annual Fee
$0

Average Yearly Rewards Value ($1,325 monthly spend)
$312

APR
26.24%

Rewards Redemption
Pros

  • Can redeem any number of points
  • Limit on gas and grocery store bonus is fairly high
  • Can redeem points on the spot for eligible purchases at participating stores

Cons

  • Points expire after 12 months
  • Points only apply to purchases at participating stores
  • No cash back option
  • No options to transfer or pool rewards

Other Notable Features: Monthly savings and special offers at Sears, special financing in select categories, $0 fraud liability, extended warranty, price protection

The battle of store credit cards seems to be heating up, with 5 percent bonus offers cropping up everywhere (see: Amazon Prime’s new 5 percent offer). With the introduction of the Sears Shop Your Way Mastercard, it looks as if Sears is trying to insert itself into the fray. The “5-3-2-1” promotion that comes with the card includes that same magical number: 5 percent.

For a 12-month period, cardholders can earn 5 points per dollar on eligible gas station purchases and  3 points per dollar on restaurant and grocery purchases. However, the 5 percent bonus on gas purchases is really the centerpiece here, because it mirrors the 5 percent offers on several competing store cards, and because – actually – 5 percent is a very high rewards rate for gas purchases.

The cap on the gas, restaurant and grocery bonuses is also very high. The 5 and 3 percent bonuses apply to up to $10,000 in combined purchases in the first year. For cardholders on the quest for the ultimate credit card discount on gasoline purchases, the Sears card’s “5-3-2-1” promotion may be enough of an incentive to sign up and at least stick with the card until the offer expires.

Unfortunately, despite the enticing introductory offer, the Sears Shop Your Way Mastercard comes with so many snags that it’s difficult to recommend this card to anyone other than a frequent Sears shopper.

Great bonus on gas, groceries and restaurants … for a limited time

The highlight of the Sears Shop Your Way Mastercard is its “5-3-2-1” introductory offer, which translates into the following rewards: 5 points back on eligible gas purchases, 3 points back on eligible restaurant and grocery purchases, 2 points back on eligible Sears and Kmart purchases and 1 point back on all other purchases. The 5 and 3 percent bonuses only apply for 12 months to the first $10,000 in purchases combined, after which the rewards rate for these categories falls to 1 point per dollar.

As mentioned, the 5 percent rewards rate on gas purchases is an exceptionally large reward, matched by very few other credit cards. Three points back on restaurant and groceries is also high. A cardholder who exclusively uses the card for purchases in all these categories in the first 12 months can stack up a large number of points.

Sears also offers a small $15 statement credit to new cardholders who make a purchase the same day the card is activated.

A big drawback: Redemption of the rewards is very limited. Despite Sears’ frequent use of “percent” in its promotional materials, these are not cash back rewards. Shop Your Way points can only be applied as a discount to purchases made at Sears, Kmart and other participating retailers. Though the bonus is large, it doesn’t have much value unless you shop with one of these retailers.

Great sign-up bonus

The Sears Shop Your Way Mastercard is currently offering a large sign-up bonus of $150 to new cardholders. Note, the spend requirement to earn the bonus is pretty steep – you have to spend at least $2,000 in the first 30 days of card membership to earn the bonus – but $150 is a generous amount for a rewards card, and, if you were already planning to use the card to make a large purchase at Sears, this may be a great opportunity to score some additional rewards from your purchase.

Low overall rewards rate

Compared to the $15 statement credit sign-up offer, the regular rewards rate on the Sears Shop Your Way Mastercard is far more modest. The card offers 2 points per dollar on Sears and Kmart purchases and a mere 1 point per dollar on all other purchases.

A 2 percent rewards rate for store purchases is low compared to many of the store cards that Sears is trying to compete with through its 5 percent introductory offer. The regular 1 percent rewards rate is especially low, and cardholders with good credit should be able to find much better options for their general purchases.

On the plus side, the Shop Your Way loyalty program is very generous with its base points. The program offers 10 Shop Your Way points on qualifying purchases to every member of the program, regardless of whether they own a Sears Mastercard. These points can be combined with the rewards points on the Sears Mastercard, providing a better incentive to use the card.

No annual fee or membership fee

It should be noted that neither the Sears Mastercard nor the Shop Your Way rewards program requires a fee to join. Warehouse club credit cards and the Amazon Prime card, for instance, are promoted as no-annual-fee cards, while obscuring the fact that the card is paired with a program that charges a large membership fee. Though these cards may offer a higher rewards rate than the Sears Mastercard, their membership fees cut into the value of their rewards.

Inflexible rewards

The biggest drawback to the Sears Shop Your Way card is its large number of restrictions. As previously noted, points only apply to purchases at Sears and a handful of retail partners. Points also have a very short shelf life, expiring after just 12 months. On the plus side, Sears does make points pretty simple to redeem for frequent Sears shoppers. There is no point minimum and – once the points reach your account – you can apply them immediately to an online purchase or upon checkout at a participating retailer.

Discounts and special financing offers

The Sears Mastercard includes monthly promotions that allow cardholders to earn additional points on certain items. For instance, a promotion in a particular month may offer cardholders a 10 percent bonus on home appliances. Cardholders can add this bonus to their base points and the 2 percent bonus that they earn with their Sears Mastercard to accumulate even more points.

While there are some good deals to be found on the Sears credit card’s offers site, cardholders should take extra caution with the card’s special financing deals. Cardholders are promised 0 percent interest on certain categories of purchases if they pay off all of the interest within a designated time period. The fine print reveals that these are deferred interest deals. In other words, if you don’t pay off the entire amount of the purchase (down to the penny) before the period expires, you will be charged the full amount of interest for the entire period.

High APR

The regular APR on the Sears Shop Your Way Mastercard is extremely high – especially for a rewards card. The average interest rate for a rewards card is 15.50 percent, according to the Feb. 1, 2017, CreditCards.com Weekly Rate Report. In comparison, the Sears Shop Your Way card charges a 26.24 percent interest rate for every customer who qualifies for the card, including those with excellent credit. The Sears card’s APR is higher than the average interest rates charged on store cards, which was 23.84 percent, according to our 2016 Retail Card Survey.

For this reason, we recommend that cardholders steer clear of carrying a balance and be wary of the Sears Shop Your Way card’s special financing deals, which could end up costing a lot of money in interest if the balance isn’t paid off in time.

A few purchase protections

The card comes with a few additional benefits, including extended warranty and price protection, that can help protect your purchases when you use the card at Sears and other retailers.

Why get the Sears Shop Your Way Mastercard?

  • You’re looking for a credit card with a high rewards rate on gas purchases.
  • You shop frequently at Sears or Kmart.
  • You’re looking for discounts on merchandise rather than cash back.

How to use the Sears Shop Your Way Mastercard:

  • Be sure to use the card on the day that it is activated, to earn a $15 statement credit.
  • Use this as your go-to card for gas, restaurant and grocery purchases for the first year, since the bonuses on these categories are very high.
  • Points expire after 12 months. Be sure to redeem them before then.
  • Visit Sears’ website for credit card members to earn additional bonuses on select categories of merchandise.
  • Avoid carrying a balance on this card as the APR is high.
  • Read the fine print on the card’s special financing offers. The interest is deferred, which means you will owe the full amount of interest on an item if you fail to pay it off by the end of the promotional period. (See: How to avoid big costs of deferred-interest financing deals)

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