The Best (and Worst) Store Credit Cards for Holiday Shopping, According to New Study

updated Jul 17, 2020
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It’s difficult to get through the checkout line these days without being upsold on opening a store credit card. But are the so-called savings really worth it? Heading into the holidays, personal finance experts are weighing in on the should-you-or-shouldn’t-you of single-store “charge cards” and their pros and cons — and a new report has a definitive list of rankings on the best store credit cards available in 2017.

WalletHub recently studied charge cards in depth so consumers could have a cheat sheet of the best store credit cards going into the holiday season — ranking retailers in a handy infographic based on their level of transparency with their customers about their credit card charges and practices. One of the major cons (and common fine print oversight) of single-store credit cards is something called “deferred interest”, and 88 percent of all deferred-interest credit cards are issued by just three banks: Synchrony, Citi, and Comenity.

Deferred interest is when retailers offer credit cards with 0 percent interest on purchases, but then go back and apply the interest if cardholders miss a monthly payment or don’t pay off the balance in full by the end of the offer period.

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The team at WalletHub found that 61 percent of consumers familiar with personal finance practices found the very concept of deferred interest unfair — 50 percent of those consumers actually think that deferred interest should be illegal — so WalletHub set about evaluating the financing options available from 75 large retailers in order to help consumers avoid such unfortunate financial surprises in the New Year.

According to the study, a few of the retailers offering the best store cards and the highest levels of transparency are TJX stores (including T.J. Maxx, Marshalls, HomeGoods, HomeSense, and Sierra Trading Post), ACE Hardware, Target, Williams-Sonoma, Pier 1 Imports and Barnes & Noble — among the worst for deferred interest (or least transparent about financing), were Amazon, Pottery Barn, Wayfair, West Elm, Toys R Us, True Value, and Bed Bath & Beyond.

No-interest (0 precent financing) is one of the two main reasons that most consumers sign up for store credit cards — the second being an attractive discount on the first purchase with the charge card.

Read the full findings and comments from WalletHub’s panel of experts on the best and worst retail store credit cards in the 2017 Deferred Interest Study.