Regardless of where you are at in your life, the idea of saving money is never a bad one. And once you find your few favorite stores to shop from, you can creatively discover ways to maximize your savings on the things you need. One of the methods stores use to get more loyalty from their shoppers is by offering rewards cards and store debit or credit cards. The benefits tied to these store cards can save you tons of money in the long run. But rather than digging yourself a deep hole of debt, you need make sure the store cards you sign up for will be right for you.
Here are five ways to find the perfect store credit card or rewards card, and some things you should know before you apply.
1. Figure out which stores you shop from the most.
Where do you buy your groceries? Where do you buy your home furnishings, cleaning supplies, and other everyday necessities? These are the places you should check first, for rewards cards or credit cards. You don’t need a different pair of shoes for every day of the year, so avoid the strictly retail credit card, but maybe consider the Target Red Card. Because let’s face it, you can always find something you need at Target.
Why the Target Red Card?
While we are infrequent shoppers at Target at present we are about to welcome a new addition to our family and our shopping needs will change. For the purposes of even basic nursery furnishings the idea of saving 5% seemed appealing. Add to that any online purchase also gets free shipping (no minimum!) and some items are still cheaper at a store like Target than at a megamall like Amazon. We could have probably gotten around it, and cobbled together the same kinds of purchases at Costco, the local grocery store, Ikea, and Goodwill, but one of the major upsides is the idea that you can get everything in one place. There is even a Super Target near our house, so a mission for baby-wares can be coupled with groceries.
Initially, it seemed low risk because the debit card is simply tied to your existing checking account – so it doesn’t add another line of credit to your portfolio. For those paranoid about their credit scores and keeping their profile clean, this is an issue. And with the recent security breach of millions of Target shoppers through their PoS system (Target Red Cardholders and many other cardholders have been affected), it makes paying attention to your credit score all the more crucial. FreeCreditScore.com is just one of several credit monitoring services that gives you access to activity tied to your identity. And if there’s any doubt as to whether your card information has been illegally obtained, always contact your bank and ask them to issue you a new card number.
2. Look for storewide discounts or cash back benefits for store rewards members or cardholders.
Lowe’s credit card frequently has either 5% off or 0% APR offers running. I signed up for this when my husband and I were moving into our first house and needed a lot of home improvement stuff, including blinds (deceptively pricey). We now only use it for major purchases at Lowe’s. It also means that when there is a major purchase we opt to go through Lowe’s instead of Home Depot. The Home Depot card only offers 0% APR, with no standing discount. They can be useful for price matching – but that’s another story.
The Costco membership is quite a popular card to carry. We have the executive membership, which has paid for itself the last two years due to their cash back reward system. Our monthly spend is roughly $200-$500 and anything that can be purchased in bulk is purchased there. Therefore the savings are double: the cash back, and the bulk savings.
3. Understand what you’re getting yourself into.
Reward cards tend to be very low risk – they’re an easy addition to your keychain, they give you better prices, and provide coupons that you can use on current or future purchases. Most major grocery stores and convenience stores have some form of a rewards card.
Store debit or credit cards can be a little bit of a harder sell for some people, since it’s another credit card to add to the list. Depending on where you do the majority of your shopping and your current living situation, they can make sense, but if you’re risk-averse stick to the store reward cards for now.
4. Consider your credit score.
Credit scores are a very real concern, especially if you’re looking to get a loan or mortgage in the near future. While it may be tempting to sign up for a credit card every time an offer comes your way, you should balance the potential savings against the complexity it adds to your personal finances. A lot of major retailers offer cards like this – you just need to determine your 80/20 rule: the 20% of stores where you spend 80% of your cash. That way you can maximize your savings while minimizing your exposure.
5. When in doubt, trust Amazon Prime.
Amazon Prime is a consuming and wonderful club to belong to. Items on Amazon that cost 2x, 3x, 4x the amount if we were to run to a local Radio Shack, Petco, etc. are now delivered to our door in two days at a fraction of the price.
Not to mention the fact that we avoid the time and stress of sitting in traffic!
What do we buy on Amazon? Anything. Multiplugs, light bulbs, kitty litter (yup), pee pads for puppy training, and any other random item that doesn’t quite fit into our normal grocery cycle.
It only costs $79 per year to be a Prime member, and it pays for itself quickly, plus it can be shared with other members of your household.
Make every purchase one that will benefit your life. Make your purchases worth the money you spent on them. Rewards and store credit cards can help you with your daily shopping needs. Just make sure the ones you choose are the right fit for you.