How to Use Branded Credit Cards to Increase Your Credit Score
Even if you don’t think you know what a co-branded credit card is, you most undoubtedly do. If you’ve ever checked out at Home Depot, Target, or any other major retailer, they’ve probably asked if you’d like to sign up for their credit card. That’s a branded credit card.
Visa, Mastercard, American Express, and Discover are the four largest credit card networks issuing cards. And you’ll often find that retailers and businesses go through them to offer you a co-branded credit card that allows you to use the card like normal while also enjoy store-specific perks.
Yes, this means that even a branded credit card can help you improve your credit score; you just have to know how to use it wisely to optimize your savings and the perks that the card offers.
What Are Branded Credit Cards?
A branded credit card, or co-branded credit card, is issued by both a major credit card issuer (Mastercard, Visa, etc.) and a retailer. For the merchant, this offers them the chance to have more people sign up with them; for the retailer, it’s a great way to build brand loyalty and receive incentives for each person they sign up.
You’re able to use a branded credit card anywhere where they accept that type of card. The Old Navy credit card is a Visa card, for example, and while you can use the card anywhere Visa is accepted, you’ll only earn a certain amount of points when you spend outside of Old Navy and Gap brands.
How to Use Branded Credit Cards
To get the most out of branded credit cards, you need first to make sure that you shop enough at that retailer to take advantage of the perks. If you never shop at Victoria’s Secret, then having a Victoria’s Secret credit card isn’t going to help you much in building credit or earning rewards.
We suggest that if you’re going to sign up for a branded credit card, make sure it’s at a retailer you frequently shop at. Then, do the math in terms of fees vs. rewards. If the card comes with a high annual fee and you don’t earn enough rewards to offset it, it’s not worth it.
As is the case with other credit cards, to build credit, you’ll need to focus on keeping your credit utilization rate low and paying your balance on time each month. Because you’ll likely only be using it to shop at a few select stores in order to earn the rewards, a branded card might be better for those tempted to overspend.
Branded Credit Cards Worth Checking Out
The Old Navy credit card is perfect for anybody (especially families) who spend a lot at Old Navy, Gap, and the Banana Republic. You’ll earn 5 points for every $1 spent at Gap Inc. brands and a $5 gift card for every 500 points earned. On top of that, you’ll count on early access to new releases and exclusive offers on hot new deals.
You only need fair credit to qualify for the Victoria’s Secret credit card, but in terms of perks, it’s really only ideal for those who do a fair amount of shopping at the retailer. Earn 1 point for every $1 spent and then a $10 reward after every 250 points earned. Enjoy free shipping on purchase over $50, a birthday treat, and 3x points when you purchase bras.
The Gap credit card comes with no annual fee and lots of great ways to earn cash back. Earn 5 points per $1 spent at Gap, Banana Republic, Old Navy, Athleta, and Hill City. For every other purchase, you’ll earn1 point per $1 spent. Plus, you’ll get a $5 gift card for every 500 points you earn.
Ongoing American Eagle rewards plus a nice first-purchase discount make the American Eagle credit card well worth it. You only need fair credit to get the store-branded American Eagle credit card (which is different from the American Eagle Visa Card), making it easy to sign up and earn the 20% discount on your first purchase. Earn 15 points per $1 spent at the brands’ store locations and 5 points per $1 spent elsewhere.
Track Your Credit Score
Having the right credit card is a great tool to use in working towards improving your credit score. However, you’ll need to find the right app that will allow you to track your score and monitor changes.
With Float, we make it easy to track your score and even share credit information with friends and family. You choose what to share and who you share it with. Decide whether you want to give someone access to your full credit report, your score and tradelines or just an emoji that indicates a credit range.
Download Float to begin the journey today.