Store credit card vs cash back and travel rewards card benefits

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• Store credit cards come with benefits, but they also have downsides, including astronomical interest rates.
• Luckily, you can get many of their benefits (and more) from rewards or cash-back credit cards.
• Using a cash-back card can simulate store discounts and help you build your credit history and score.
• Many non-store cards also offer additional shopping perks, such as extended warranties and purchase protection.
• Read Business Insider’s guide to the best rewards credit cards.

There’s no denying store credit cards have their perks, which often include upfront savings and ongoing discounts. But store cards have their drawbacks, too, not the least of which are sky-high interest rates.

If you’re leaning toward opening a general cash-back or rewards card instead of a store card — and here are six reasons why you should — will you be sacrificing the benefits you’d get with a store card?

Not necessarily — here are some popular benefits of store credit cards that you can replicate with regular rewards credit cards.

Welcome offers

You’ve heard the pitch before: “Would you like to save on your purchase today by taking out our credit card?” Store credit cards often boast welcome offers that will save you a big chunk of change at the register as a thank you for opening the account.

Many credit cards, though, come with some kind of introductory bonus — or at least an opportunity to earn one after spending a certain amount on the card. And there are plenty of cash-back and travel rewards credit cards with welcome bonus opportunities that dwarf those you can get with store credit cards.

Consider the Blue Cash Preferred® Card from American Express, which offers a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months. Unless you’re dropping $1,000 on a single shopping trip, that offer is better than, say, a “20{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} off today’s purchase” offer that you might see with a store credit card.

And those looking to use their rewards for travel can do even better. The Chase Sapphire Preferred® Card, for example, is currently offering 60,000 points after you spend $4,000 on purchases in the first three months of account opening. Those points are worth $750 when you redeem them for travel through the Chase Ultimate Rewards portal, and if you transfer them to airline and hotel partners, they’re potentially worth much more.

Ongoing discounts

Other perks that make store credit cards appealing are the discounts and promotions throughout the year to help you save at your retailer of choice. However, with a cash-back card, you’re effectively already getting a discount each time you shop if you factor in the money that’ll go straight back into your pocket.

Sure, using a cash-back card doesn’t amount to a big discount all at once the way a 20{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} off coupon through your store credit card would. But on the flip side, you’re earning cash back on all purchases when you use it — not just purchases at a specific retailer.

Take the Chase Freedom Unlimited®, which has a welcome bonus of $200 after spending $500 in the first three months from account opening. The card offers 5{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} cash back on travel purchased through Chase Ultimate Rewards, 3{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} cash back on dining (including takeout and delivery) and at drugstores, and 1.5{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} cash back on all other purchases. On top of that, new cardholders will get 5{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} cash back on grocery store purchases on up to $12,000 in the first year of holding the card — worth an additional $600 if you make the most of it.

Unless you do the serious bulk of your spending at one specific retailer, a cash-back card like this one — with a broad array of bonus categories — can help save you far more money than a smattering of discounts you’ll get throughout the year from a store credit card.

Free shipping

With many people moving much of their shopping online because of the COVID-19 pandemic, free shipping has become a key benefit for cardholders. Store cards including the Target RedCard offer free shipping without a minimum, which can help you avoid fees — or adding unnecessary items to your cart just to reach the free shipping threshold.

But store cards aren’t the only ones that come with shipping perks. Several popular credit cards come with a complimentary ShopRunner membership that will secure you free two-day shipping and free returns at more than 100 stores, including Saks Fifth Avenue, CB2, and Under Armour.

You can nab the benefit with American Express cards like The Platinum Card® from American Express, American Express® Gold Card, or Blue Cash Preferred® Card from American Express. World and World Elite Mastercards, including the Citi® / AAdvantage® Platinum Select® World Elite Mastercard® also come with ShopRunner membership.

Low barrier to entry

For some people, an attractive feature of store credit cards is that they don’t require the pristine credit scores you’ll need to secure premium travel rewards cards. You may be able to take out a store credit card with fair or average credit, and using one can help you repair or build your credit over time.

But there are other cards out there you can use for the same purpose that’ll help you rack up cash back and valuable rewards in the meantime. The Discover it® Secured falls into that category, earning you 2{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} cash back at restaurants and gas stations on up to $1,000 in purchases each quarter and 1{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} on everything else. It will also match the amount of cash back you’ve earned at the end of your first year, with no limit.

Meanwhile, if you already have some credit history and can qualify for the Chase Freedom Unlimited® or Chase Freedom Flex℠, you can build your credit while banking rewards. Later, after buoying your credit score, you could open a Chase travel rewards credit card like the Chase Sapphire Preferred® Card and combine your points, which you can then transfer to Chase’s airline and hotel partners like United or Hyatt.

Are there store credit card perks you can’t get with a non-store card?

Of course, there are some store credit card features that are so specific to the retailer that you won’t find them replicated with other cards. Those might include cardholder-only gifts or extended return periods.

But it’s a two-way street. Many non-store cards also offer shopping perks that store credit cards can’t match, such as purchase protection and extended warranty. For example, the Chase Freedom Unlimited® will protect your purchase for the first 120 days against damage or theft up to $500 per claim, up to a ceiling of $50,000 per card account. The card will also extend a US manufacturer’s warranty for a year as long as it’s an eligible warranty of three years or less.

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