Retail Store Credit Cards for People With Bad Credit

Store credit cards have less stringent approval requirements.

Bad credit blocks you from opening new accounts because lenders who see a negative past history are afraid you will continue your bad financial management. Retail store credit cards give you a way to prove that you are serious about rebuilding a good credit rating. These accounts work like regular credit cards so you can demonstrate that you will use credit responsibly despite your past issues.



Retail store credit cards are revolving credit accounts good for use only at a particular store, chain or brand of retailers. You get a specific credit line to spend at the designated stores and access it with a credit card. You can buy whatever you want at those particular stores until you reach the credit limit. You must pay at least a minimum amount every month, which is noted on your statement, but you can pay more. You do not pay interest if you send the full amount owed every month by the due date.


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The requirements for getting a retail store credit card are similar to those for major credit cards like American Express, Visa, MasterCard and Discover, but stores often have lower credit rating thresholds than the major card brands, according to the Bankrate financial website. People with past financial problems like past-due accounts, or even bankruptcy, often qualify for retail cards even if they cannot get branded accounts like MasterCard or Visa.


People with bad credit rebuild it by using retail store cards regularly and responsibly. The Fair Isaac scoring company advises that your score is most strongly affected by your payment dates and how much you owe on open accounts. Your score rises if you make small purchases on your retail store credit card and either pay them in full monthly or spread out a string of on-time payments. Eventually, this qualifies you for major brand accounts.



Retail store credit cards often give low credit limits and charge higher interest rates than regular branded cards, according to Bankrate. Some accounts do not help people with bad credit because the issuers do not report activity to the Experian, TransUnion and Equifax credit bureaus. On-time payments have no effect on your credit rating if they never appear on your credit reports. Do not apply for a retail card without asking whether the bureaus get notified of your activity.



Retail store credit cards are helpful if you have bad credit, and they also let you establish a history if you are new to credit use, according to Bankrate writer Leslie McFadden. Of your credit score, 15 percent is affected by the amount of time you have used credit, so retail accounts let you create a track record for a year or two before you apply for major cards.