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Nearly every store in the mall offers a charge card that can be used for in-store purchases only. And some of the major stores even offer a co-branded credit card that can be used anywhere. Luxury retailer Saks Fifth Avenue has just partnered with Capital One to introduce the Saks First card. The idea is not unique, however this product does have some notable features.  Let’s look how it measures up as a retail card, and how to tell if the costs will ultimately be worth the benefits.

How This Card Works

New cardholders receive a $25 welcome card with their first purchase outside Saks. After that, cardholders receive two points per dollar spent at both Saks and their OFF 5th outlet stores. In addition, cardholders can receive double or triple points on designated days. Furthermore, purchases between $5,000 and $9,999 each year receive twice the number of points, and triple points for annual charges in Saks stores above $10,000.

Outside of Saks stores, cardholders receive two points per dollar spent at restaurants, grocery stores, and gas stations, and three points per dollar at salons and spas.

Once earned, points are worth one cent each towards an annual SaksFirst Gift Card.

This card comes with a host of other features not commonly found on cards offered by retailers. For example, cardholders receive free shipping for in-store and online purchases. As a Capital One card, there are no foreign transaction fees. And finally, this card is part of the World Elite MasterCard program, which features a host of benefits by itself. There is no annual fee, and the interest rate is 23.99% APR.

How Do the Rewards Measure Up?

Credit cards co-branded with stores typically feature weak rewards programs, but this card actually has some valuable bonus categories. In addition, this program bestows extra rewards on its best customers, those who spend $5,000 or even $10,000 a year at Saks. And finally, it carries no foreign transaction fees and, as noted above, is a World Elite MasterCard.

The Paradox of Luxury

There is no doubt that Saks Fifth Avenue is one of the nation’s most exclusive luxury retailers. And it is also clear that Saks has created an innovative and worthwhile reward credit card. But it is difficult to imagine a large market of cardholders who will spends thousands of dollars a year at a luxury retailer while being concerned about earning some rewards that are quite modest by comparison.

But at the same time, a more frugal cardholder could shop at Saks OFF 5th outlet stores occasionally, and use this card mostly for purchases in bonus categories of spending. Such a customer could earn at least a 2% return on spending in the form of a gift card valid at Saks stores. And if cardholders actually take advantage of some of the card’s additional benefits, it could earn a place in their wallets.

Image: iStockphoto

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