The aggressiveness of retailers trying to get consumers to sign up for a store credit card has gotten out of hand.
It’s increasingly common to be asked by the cashier if you want to sign up for a credit card when making a purchase. You’re not even safe doing self-checkout or buying things online, since you’re just as likely to get prompted when you’re about to pay there, too.
Credit cards are big business for retailers, but the over-the-top sales tactics often result in an instant “no” from shoppers before the sales pitch begins. That said, some of the rewards and benefits offered by the cards are often worth a second look.
More retailers getting in on the action
Store credit cards are not new, but to push to get more sign-ups has noticeably increased. Just recently, while browsing the aisles at my local grocery store, a sales representative started telling me about the benefits of the store loyalty program and credit card. I was even approached while pumping gas. Having a nearly empty tank, the rep had a good minute to make his pitch before I could escape.
According to Equifax, Canadians spent 14.5 per cent more in the first quarter of 2023 compared with the same quarter a year earlier. In addition, 175,000 more consumers missed at least one non-mortgage payment – for things such as auto, personal and student loans, for example – which resulted in interest charges. In both scenarios, credit-card providers are profiting. Plus, since most store credit cards are tied to their loyalty programs, retailers can get insights into consumer spending habits and can make direct offers to encourage more spending.
Targeting people while they’re in stores or shopping online is smart. They’re already customers, so making a value proposition with a credit card is good marketing. However, many consumers will agree that pushing a credit card while they’re shopping couldn’t be more inconvenient. While pumping gas isn’t great, either.
What’s in it for consumers
Despite the fact that you can often get an immediate or future discount on your purchase, signing up for a store credit card on the spot is usually not a good idea. When approached, you’re often presented with just the positives, and you don’t have the time to analyze the facts to see if it’s a good fit for your lifestyle. More importantly, you can’t immediately compare the offer with those of other cards. And this assumes you’re even interested in getting another credit card in the first place.
For example, PC Financial just released the new PC Insiders World Elite Mastercard. With this new card, you’ll earn more PC Optimum points at Loblaw-owned grocery stores, Shoppers Drug Mart and Esso/Mobil gas stations. You also get free online grocery delivery and pickup, but the card comes with an annual fee of $120.
If you shop at Loblaw-owned grocery stores and use PC Express for grocery delivery/pickup regularly, this card could be a good fit. However, if you typically shop for groceries on your own in-store or don’t spend much, the value proposition drops considerably. You’d be better off with a no-fee PC Financial Mastercard as it would still allow you to earn PC Optimum points on every purchase.
The other reason you want to avoid applying for a new credit card in a store is that the representative could have the wrong information or unintentionally mislead you about the benefits of the card. For example, some stores offer multiple credit cards, and you may need a higher income to qualify for the card that offers the most benefits.
Store credit cards worth looking into
The rewards and benefits of no-fee store credit cards can be appealing. Some cards worth looking into include:
Triangle World Elite Mastercard. Earn Canadian Tire money that can be redeemed at stores such as Canadian Tire, Sport Chek, Mark’s, Party City, Atmosphere and more. Plus, you get a free Roadside Assistance Gold Plan. The Triangle app also tends to have good offers.
Walmart Rewards World Mastercard. The only way to earn Walmart rewards is with one of their credit cards. This card earns you 3 per cent in Walmart rewards dollars at Walmart.ca and 1.25 per cent at Walmart stores and gas stations.
Rogers Mastercard. If you have a qualifying service with Rogers, Fido or Shaw, and choose to redeem the cashback earned with this card on one of their services, you’ll get a redemption rate of 3 per cent. That’s one of the highest rates of return for a no-fee card. Rogers mobile customers also get five free Roam Like Home days each year, which allows for phone service in other countries at no additional charge.
When fact-checking credit cards, what you want to look out for are annual fees, any conditions associated with earning and redeeming rewards, and any income requirements. You also want to ensure that any credit card you get – from a store or bank – makes sense for your spending habits and goals without having someone pressuring you on the spot to apply.
Barry Choi is a personal finance and travel expert at moneywehave.com. He was previously affiliated with PC Financial, Canadian Tire, Walmart, and Rogers but currently has no relationship with any of the brands.
Barry Choi