What Is The Difference Between A Credit Card And Store Credit?


A credit card is essentially a contract between a cardholder and a financial institution. At its most basic level it’s a loan. Credit cards work on a revolving account system.  

When you qualify for a credit card it means that a financial institution believes that you are creditworthy enough to afford to make repayments. To save on having to pay high interest, it’s important to make repayments on time every month when they are due. 

Key figures to look at when you are considering the difference between a credit card and store credit include: annual fees, interest rates, payment terms and credit limits.  

A credit limit is a capped amount of money provided to you by the issuing financial institution. By developing good credit habits you may qualify for a higher credit limit. 

Having access to a credit card can be very useful for when you need extra cash. If you suddenly have to pay for a medical emergency, having a credit card can be ideal. In addition to the convenience, it may be quite tempting for many people. This is why it’s important to be able to use this card wisely. 

One of the benefits of having a credit card is that it’s accepted at many different merchants. These cards also have a lower APR on purchases that store cards. 

The difference between a credit card and store credit: 

Store cards are generally only accepted at particular merchants. They are usually welcome at any branch store run by the merchant. 

Having access to store credit also means that you have cashback options, which give you a percentage of your cash back each time you use the card. 

Store credit often has higher interest rates compared to credit cards. They also have low credit limits.  

Regular credit cards look better for your credit, while store credit cards may be good for getting started with credit.


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