Credit cards are pictured, on February 5, 2013 in Rennes, western France.
Credit cards are pictured, on February 5, 2013 in Rennes, western France. - 
Listen To The Story

Most credit card users these days want something back – like points, miles or money.

“People of all shapes and sizes, all income levels, they all prefer cash back for their credit card rewards,” said Matt Schulz, with He said store cards can’t compete with perks from cards like Visa and American Express, which are in an arms race of rewards.

Back in the 1990s, nearly 20 percent of shoppers used single-store cards. Now, only about 6 percent of people use those types of credit cards. It's not just about the perks and simplicity of carrying fewer cards – its also a generational thing, said Ron Friedman, a retail consultant with Marcum LLP. He said when he was growing up, his "parents had a credit card for every department store."

But there are still some people applying for store credit cards – those with bad credit. And people with bad credit are often willing to pay higher interest rates.

“A lot of times those types of cards are the only option for certain people,” Schulz said. The average credit card rate is 16 percent but for store branded cards the rates are between 22 and 26 percent.

Offering store credit cards also builds customer loyalty. That's why stores aren’t giving up so easily. Retailers like Macy’s and J.C. Penney pour on the promotions. Stores like Nordstrom offer tiered reward systems to customers who spend more on their store cards, all in an effort to get customers in their brick and mortar stores – or at least shopping using their store credit cards.


As a nonprofit news organization, Marketplace is on a mission that drives what we do every day: to increase economic intelligence across the country. But we can’t do it alone. Become a Marketplace Investor today, in whatever amount you choose, and your donation will go twice as far, thanks to a dollar-for-dollar match from The Kendeda Fund.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.

Follow Erika Beras at @@Erika_Beras