How the Sears Credit Card Works: Benefits and Rewards

Reviewed by Katie MillerFact checked by Vikki VelasquezReviewed by Katie MillerFact checked by Vikki Velasquez

Sears is one of the nation’s leading merchandise retailers and is a wholly-owned subsidiary of Sears Holdings Corp. (SHLD). Its history dates to 1886, when a railroad station agent named Richard Sears began selling gold watches by mail and built a business empire with a mail-order catalog that sold everything from hats to houses.

Formerly called Sears, Roebuck, and Co., the company continued to thrive into the late 20th century, opening stores coast to coast and acquiring brands including Kmart, Kenmore, Craftsman, and DieHard.

The company has hit rocky times in recent years, filing for bankruptcy protection in 2018. Once the nation’s predominant retailer and its biggest employer, with approximately 3,500 stores nationwide, in November 2019, the company announced it was closing all but 182 stores. As of September 2024, there is only one small Kmart store in Miami and just 10 open Sears stores in the United States. There are still a handful of each retailer in Guam and the U.S. Virgin Islands.

Key Takeaways

• Sears offers a co-branded MasterCard with several rewards and perks through Citibank.
• Cardholders can earn cashback rewards points to be redeemed in-store or online, in addition to seasonal promotions like no-interest financing on certain purchases.
• The card has no annual fee and comes with limited insurance.

How the Sears Credit Card Works

Sears offers a co-branded Mastercard through ith Citibank of Citigroup Inc. (C). The “Shop Your Way” credit card is part of the Sears rewards and benefits program. The card works like a typical cash back credit card—you earn points for eligible purchases, which give you cash back through your Shop Your Way account. You can redeem points for a statement credit or gift cards for other Shop Your Way merchants.

Since the Shop Your Way card is a MasterCard, you can use it to make purchases anywhere and earn points for shopping. Here’s how you earn points with the card:

• Earn 5 points for every $1 spent on gas
• Earn 3 points for every $1 spent on groceries and restaurants
• Earn 2 points for every $1 spent on purchases at Sears, Sears Home Services, Kmart, and their websites
• Earn 1 point for every $1 spent on all other eligible purchases

Be aware that the card does have limitations. You’ll only earn the extra points for the first $10,000 of combined gas, groceries, and restaurant purchases per calendar year. Once you’ve hit $10,000 in spending, you’ll earn 1% back until the next calendar year.

Card Benefits

The card has no annual fee and gives users access to Sears coupons, discounts, and cash back. You will get some very basic insurance protection, including zero liability on authorized charges, price protection, extended warranty, and identity theft protection.

Occasionally, Citibank offers statement credit bonuses for new accounts, so check to see if they’re running a promotion before you apply for a card. You might be able to earn hundreds of dollars in statement credits just for opening a line of credit.

Card Terms and Conditions

The Sears Mastercard has an APR of 34.24% for purchases and cash advances. That’s significantly higher than you’ll typically see for a rewards card.

The transaction fee for cash advances is $5 or 5% of the cash advance amount.

As of September 2024, purchases made at the Sears Home Center with a Sears Card have a variable APR of up to 34.24% after the introductory period, depending on the creditworthiness of the applicant.

Sears Home Services Financing

Cardholders can also take advantage of special financing offers for home improvements, like 18-month zero-interest financing on home improvement items such as heating and air conditioning equipment, windows, entry doors, and home generators.

Cardholders can use this card to finance purchases with the Sears Home Services division, which also assists with installing and maintaining these large purchases. For example, customers who want to upgrade their homes’ windows can get both the material and installation completed with the Sears Home Services group.

How to Apply

Customers can apply for the Sears credit card or the Sears MasterCard on the Sears website or at a Sears or Kmart store.

Applicants must provide personal financial information and submit a credit check. Be aware that your credit score might drop because a hard credit check is reported to credit bureaus. However, the drop is usually temporary.

Required Credit Score

Sears and Mastercard, like most credit issuers, do not post guidance on their credit rating requirements. However, credit cards of this type are generally easier to get than many others for a couple of reasons: the credit limit issued can be fairly low, and the interest charged for carrying a balance forward is high. That makes them relatively non-risky and very lucrative for the issuer.

An applicant with a credit score of about 580 to 669, or within the “fair” range, is likely to get approved.

Applicants must be at least 18 years or older or 21 if living in Puerto Rico.

Where Can the Card Be Used?

You can use the Sears credit card at Sears, Sears Home Services, Kmart, and at their online stores. You can also use the card anywhere Mastercard is accepted.

Alternatives

There are many other credit cards available to consumers that provide rewards programs for usage.

Sears has several competitors in the retail space that offer such cards and promotions, such as Walmart Stores Inc. (WMT), Home Depot Inc. (HD), Best Buy Co. Inc. (BBY), and Macy’s Inc. (M). Each of these retailers offers its customers credit cards. For example, a My Best Buy card allows up to 24 months of special financing for any major appliances as well as 5% back in rewards points.

The Walmart credit card offers 5% savings on Walmart.com purchases, 2% savings at Walmart stores, restaurants, travel and gas stations, and 1% savings anywhere else the card is accepted.

Consumers who make large purchases at Home Depot can use the Consumer Credit Card that allows up to 24 months of financing during special promotions and includes a one-year hassle-free return policy.

Who Should Consider the Sears Credit Card?

Sears may be a shadow of its former self, but it has a long-held reputation for quality appliances, tools, auto parts, and lawn and garden equipment. It may not be the first name on most peoples’ minds when they’re considering a major purchase for the home, but the Sears.com website is worth a price comparison with other retailers.

For appliances, it carries brands like Frigidaire, GE, and LG, as well as its own Kenmore brand. Its tools department has Dewalt, Black&Decker, and Craftsman, the brands it once built and owned. It no longer owns the DieHard battery brand, but it still sells them, along with other name brands.

If you happen to live near one of the few remaining Sears stores, the Shop Your Way Mastercard could come in handy. The company maintains an online store locator, although it has been reported to be unreliable.

Shoppers who make frequent large purchases at Sears benefit the most from getting a Sears card. The biggest benefit to having one of the cards is the offer of no-interest financing. Customers planning a major home remodel or upgrade home might consider using their Sears Card. Instead of paying for the remodels immediately or with another credit card, Sears Home Services offers credit card financing options for no-interest repayment over 18 months.

What Are the Benefits of Having a Sears Credit Card?

For a store credit card, it’s actually got pretty good earn rates, especially if you use the card to make gas, grocery, or restaurant purchases. Plus, you’ll get some good promotional offers for Sears Home Services, which is useful if you’re considering a home renovation project.

Is It Hard to Get a Sears Credit Card?

Applicants for a Sears Credit Card or a Sears MasterCard should find it relatively easy to obtain credit from either as long as their credit ratings are within the “fair” range, or about 580 to 669.

Does Citibank Own the Sears Credit Card?

Sears and Citibank jointly issue the card, which can be used anywhere Mastercard is accepted. Citibank is the card administrator, so your bill will come from a Citibank address.

This type of co-branded card is now commonly available from American retailers.

Where Can You Use the Sears Credit Card?

Since the Shop Your Way card is co-branded with Mastercard, you can use the card to make purchases anywhere Mastercard is accepted.

The Bottom Line

Business writers and financial analysts sometimes refer to Sears as a “zombie retailer,” and for good reason. Once a behemoth of American retailing, Sears has shrunk to a handful of aging stores and has unloaded some of the brands it built from scratch, like DieHard batteries and Kenmore appliances.

Yet those brands and many other major brands are still available on the Sears website. If you’re considering making a big purchase, comparison shop to see if charging it to your Sears Shop Your Way Card makes financial sense.

Read the original article on Investopedia.