Kohl's Card review: Restrictive rewards and few benefits

At first glance, the Kohl's Card looks rewarding for Kohl's purchases — but a closer look reveals there's a lot to be desired. For example, you can only earn and redeem Kohl's Cash on Kohl's purchases and the rewards expire. When you consider the competition from other no-annual-fee credit cards, which offer more options for earning and redeeming rewards that don't expire, it makes this card hard to justify opening.

Below, CNBC Select breaks down the Kohl's Card's rewards, benefits and fees and offers a few alternative rewards credit cards to help you find the right card for you.

• Welcome bonus
• Benefits and perks
• How to earn and redeem Kohl's Cash
• Rates and fees
• Kohl's Card alternatives
• Is the Kohl's Card right for you?
• Bottom line

You get 35% off the first purchase you make within 14 days of being approved for your Kohl's Card.

The Kohl's Card is issued by Capital One, but has a few benefits and lacks the meaningful perks available with other Capital One cards.

Cardholders receive exclusive monthly deals and an anniversary offer each year. After you spend $600 on your Kohl's Card in a calendar year, you'll receive MVC (Most Valued Customer) status, which entitles you to periodic free shipping. For those who have trouble keeping track of their receipts, Kohl's Card purchases can be returned without a receipt.

Earning

The Kohl's Card earns rewards at the following rates:

• 7.5% in Kohl's Cash on Kohl's purchases

While 7.5% back sounds great, keep in mind that you earn 5% in rewards as a Kohl's Rewards member. So Kohl's Card holders are only earning an additional 2.5% in rewards. Also, certain items and brands are excluded from earning Kohl's Cash, such as gift cards and Sephora products.

Redeeming

Kohl's Cash is essentially a coupon and cannot be redeemed as a statement credit or converted to cash. If you have $10 in Kohl's Cash, you get $10 off your next purchase.

Kohl's Cash is applied to purchases before other discounts, which means it can reduce the value of the special offers cardholders receive. For example, if you're making a $100 purchase and want to use a 20% off coupon, that's a $20 discount. But if you first apply $50 in Kohl's Cash to the purchase, you receive 20% off the remaining $50 which cuts your discount down to $10. So Kohl's Cash and Kohl's Card offers work against each other instead of stacking.

There are some limitations to what you can use Kohl's Cash for. You cannot redeem Kohl's Cash for certain purchases, including Sephora products, gift cards, shipping and Kohl's Cares charitable merchandise.

The Kohl's Card has a $0 annual fee and a variable 30.99% APR. You can be charged up to $40 for returned payments and late payments.

The Kohl's Card is a store credit card and can only be used at Kohl's. On top of that, Kohl's Cash can only be redeemed for Kohl's purchases and is valid for just 30 days. This card does offer an additional 2.5% in rewards for Kohl's purchases, but there are alternative credit cards that provide a comparable level of return without having to worry about rewards expiring every month.

Earn 2.5% back no matter where you shop

The Alliant Cashback Visa® Signature Credit Card is a cash-back credit card with no annual fee. It earns 2.5% back on the first $10,000 in eligible purchases per billing cycle and 1.5% back on all other purchases. Cash back rewards are extremely flexible and you can use the Alliant Cashback Visa card anywhere Visa cards are accepted. This card also has other benefits such as extended warranty protection and travel accident insurance.

However, to earn the elevated 2.5% back you'll need to qualify for Alliant's Tier One Rewards. New cardmembers automatically qualify for Tier One Rewards for the first 100 days. To continue benefiting from Tier One Rewards, you must have an Alliant High-Rate Checking account and meet other requirements, including a $1,000 daily balance and one electronic deposit each month. Another hurdle for this card is that it's a credit union card, which means you'll need to be an Alliant member to qualify. Although Alliant membership isn't difficult to obtain, the easiest way to join Foster Care to Success and Alliant will pay the $5 membership fee.

A simpler cash-back credit card

The Citi Double Cash® Card is simple and effective. It earns 2% back on all purchases (1% when you buy and 1% when you pay) with no caps. It also has $0 annual fee and no foreign transaction fees.

You can also unlock additional value for your Citi Double Cash rewards by pairing it with the Citi Premier® Card (see rates and fees). Doing this allows you to transfer the points you've earned with your Citi Double Cash to all of Citi's airline and hotel transfer partners. When you transfer points, you can dramatically increase the value of your rewards. For example, 30,000 Citi points can be redeemed for $300 cash back or you could transfer those same points to Turkish Airlines and book two round-trip flights to Hawaii.

When you look at what other credit cards offer, it's hard to justify adding a Kohl's Card to your wallet. With a Kohl's Card you're locked into shopping with Kohl's, and Kohl's has few (if any) products that aren't sold by other retailers. That means if Kohl's doesn't have the best price, the additional rewards you earn or special discounts you have may not be as valuable as they appear.

You will most likely be better off opening a solid no-annual-fee cash-back card. That gives you the ability to earn rewards everywhere and redeem them for anything.

The Kohl's Card is a store credit card that locks you into earning and redeeming rewards at Kohl's. However, there are alternative credit cards that can be as rewarding and are far more flexible. And even if you don't have a Kohl's card, you can still sign up for Kohl's Rewards and earn 5% in rewards on your Kohl's shopping.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best credit cards.

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