The Complete JCPenney Credit Card
With 864 department store locations spread across the USA, JCPenney is one of the most easily recognizable retail providers in the country. With that said, it has struggled immensely in recent years. The growth of online shopping has brought about tough times for brick and mortar stores, and JCPenney is no different.
At the end of 2018, its stock price dipped below $1 a share for the first time in the 110-year history of the company. The prospects look grim for the company, which is attempting to reverse its huge amounts of debt and bring shoppers back to its stores.
It offers a JCPenney Credit Card to customers too, but many cardholders will find that this poor offering isn’t the best available for them. Here’s a closer look at why the JCPenney Credit Card will probably not play an important role in reversing the fortunes of the company.
In terms of the main rewards that you’ll see, there are quite a few nice ones. If you’re a devout shopper at JCPenney, it could make the card worthwhile. A series of issues reverse this positive aspect however – but more on that later.
You’ll find that you earn one reward point for every dollar that you spend at JCPenney with your card. When you rack up 200 points, you’ll earn $10 in JCPenney Rewards. At a 5% rate, this isn’t a bad return, and there’s no limit to the amount of points that you can rack up. The rewards are also quick to appear, generally available for use within 24 hours.
While there’s no limit to the number of points that you can earn, there is a limit to the number that can be used on a single purchase. You’ll find that you can use a maximum of 10 reward certificates on a single purchase, for a total of $100.
These points will never expire, but only if your membership is active. This is defined as you using the card at least once within a 12-month period.
As a cardholder at JCPenney, you’ll also receive updates on exclusive members-only offers. These rack up throughout the year, and you’ll fine more than 100 annually. These can vary from opportunities to rack up more bonus points, receive special coupons, and get special discounts around the holidays.
How Points Work
We appreciate that the points system is so straight forward, and the value is so clear. Many reward systems obscure the value of their points and this can be frustrating. The return of 5% isn’t bad, and if you’re a fervent shopper at JCPenney, you’ll be pleased with that point value.
With that said, it’s important that you understand there’s a time limit on your rewards certificates. Many cardholders get caught out here, and don’t realize that there’s a 45-day time limit on all rewards certificates. This makes the rewards system particularly poor, given that you have to spend on big-ticket purchases to generate points, which then have to be used quickly. Paired with the fact that you can only earn a maximum of 2,000 points on a single purchase, the rewards system really isn’t great.
Lower Qualifying Requirements
One positive is that store credit cards like the JCPenney credit card often have lower qualifying requirements. This means that even if you have a poorer credit rating, you may be eligible. This can help you to begin the process of building up your credit score. But you should exercise caution with this card, as we will discuss later in this review.
A Lackluster Tiered System
It’s very common for companies to offer multiple tiers to their rewards system, and JCPenney is no different. If you spend $500 in a calendar year, you’ll be bumped up to the Gold Card. This simply means that you receive an exclusive coupon book, free shipping, and a pick your own sale day.
After you’ve spent $1,000 in a calendar year you will receive exclusive access to special sales. Both of these tiers are disappointing when compared with alternatives and the tiers that they offer. What’s more, you have to maintain your level of spending over the years or you will be downgraded.
Poor Sign-Up Bonuses
You’ll find that the sign-up bonuses on offer from JCPenney aren’t great, especially when you look at the other alternatives that are out there on the market. This lack of incentive makes it difficult to get excited about the card. The lack of effort here is also indicative of a general lack of quality surrounding the card – but more on that soon.
The standard sign-up bonus is a 20% discount off select products, or a 5% discount on major appliances. These discounts only apply to the first in-store or online purchase that you make on the day your account is opened.
A High APR
With a whopping 27.99% purchase APR, it’s very important that you don’t carry a balance on the credit card. If you do, you’ll find that you quickly incur huge interest rates. If you do decide to go for the card, it’s very important that you diligently settle balances quickly and on time.
There are many alternatives on the market that offer far superior rates to cardholders, so you may want to take those into proper consideration. The average interest rate on credit cards is placed at around 13%, so the rate offered by this card is very poor indeed.
No Annual Fee
The company does not charge an annual fee. This means that you can don’t offset the benefits of your rewards immediately, and it’s a nice touch. Some other competitors do charge high annual fees, so this is a positive that works in favor of the card.
Stuck within the JCPenney Ecosystem
There are credit card alternatives on the market which empower you to generate points from purchases made anywhere else. This becomes much more valuable to you, unlike the JCPenney card which locks you into their ecosystem. To earn points, you must spend in store, and those rewards can only be used one again with JCPenney.
Unless you shop exclusively with JCPenney, it’s very difficult to see how this card is worth it – even with the 5% rate that it offers.
Poor Customer Service
Unfortunately, it’s all too common to hear about customer service issues with the JCPenney Credit Card. Naturally, experiences will vary from one person to another, but there seems to be a clear trend toward negative experiences.
Some quick research will throw up a range of horror stories. Accounts can be closed without notice, the customer service appears to be unresponsive, and it can negatively impact on credit scores. Again, the experience will vary from person to person, but it seems perhaps like JCPenney as an organization is in a difficult period and their resources are not being allocated towards care for its Credit Card.
You don’t want your credit rating to be affected by this poor level of service. Many users report having issues with their credit rating being dropped due to outstanding interest charges.
The Needs for Strategy
Given that the APR is so high, and the rewards are fairly poor, it’s important that cardholders are able to develop a strategy that helps them to maximize their rewards. Just one lapse in memory can mean that a batch of interest from one month can undo the value of the other rewards.
It is also important to develop a strategy around the initial opening discount. If you are planning a big-ticket purchase, you should wait until your account has been opened and you could save a significant amount of money.
Terms and Conditions
As with any other credit card, it’s important that you read and properly understand the terms and conditions that you’re facing. If you have any doubts you should be sure to contact JCPenney directly and ask for the answers that you need. This exercise will also allow you to get a feeling for the level of customer service you can expect to receive.
The Bottom Line
Unless you shop religiously at JCPenney, it’s hard to see how this credit card is worth your time. Poor sign-up bonuses, a gigantic APR, restrictive rewards, and poor customer service mean that you should probably give this card a miss.
While you may be tempted to try and benefit from the regular offers and exclusive deals that are available to cardholders, these probably aren’t worth it.
It’s also important that you take JCPenney’s current predicament into consideration. Given the dire financial situation that the company faces, now probably isn’t the best time to be tying yourself to the company. As more and more physical locations close across the country, you might even find that the number of stores that you have access to is reduced.
You’ll find a wide range of viable alternatives out there on the market with just a little research. These alternatives will offer superior APR, more opportunities to earn points on all of your purchases, and more attractive redemption options.
David is a financial expert who graduated from the University of Fordham (Master in Finance) in 2001. He has 10+ years of experience in private equity and wealth management. With strong expertise in senior-level financial planning, personal financial analysis, and mortgages, David knows his way around personal finance. Before working at CCR he used to be a financial analyst at McKinsey.
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