Nordstrom Visa® credit card review: Underwhelming rewards, even for Nordstrom fans

This is easily one of the most lucrative and versatile rewards cards available for retail shoppers. It offers perhaps the best rewards rate out there at many popular stores, including not only Nordstrom, but also Amazon.com, Anthropologie, Best Buy, Ikea, Kohl's, Lululemon, Macy's, Target and more (24 total options). 

The catch? The card comes with a $0 introductory annual fee for the first 12 months. After that, $95 annual fee after the first year ($0 intro fee for the first year). You can also only choose two retailers to be eligible for 6 percent cash back, and that rate only applies to your first $1,500 in combined eligible purchases each quarter. After you reach that threshold, you'll only earn 1.5 percent back at those stores.

Despite these caveats, the card will likely still be worth it — at least if you spend heavily at your chosen brands. 

If you met the $1,500 rewards rate cap at your two chosen retailers each quarter, you'd earn $360 in rewards — $265 in net value if you consider the annual fee (and don't consider rewards you could earn in other categories). With the same total spend on the Nordstrom Visa, you'd earn just $120 in rewards ($6,000 at 2 percent back). You'll also have the flexibility to redeem rewards to cover any purchases — not just Nordstrom purchases.

That said, a $1,500 spending assumption may not be realistic for you. If you only shop at Nordstrom and other retailers occasionally, this card may not be worth the cost. 

The Blue Cash Everyday® Card from American Express offers multiple higher-earning categories, including retail shopping. The welcome offer also gives significantly more initial value, including a strong intro APR offer. You’ll earn 3 percent cash back at U.S. supermarkets, U.S. gas stations and U.S. online retail purchases (up to $6,000 in purchases annually in each category, then 1 percent), and 1 percent cash back on everything else.

You’ll earn more shopping online at Nordstrom with this card than the Nordstrom Visa unless you have a higher Nordstrom status, although earnings are capped. Like with many comparisons between store-specific and standard credit cards, the decision comes down to how you value the in-store benefits the store card offers. Standard credit cards like the Blue Cash Everyday® Card offer more earning possibilities and greater flexibility than store cards like the Nordstrom Visa.

TD Bank issues both the Nordstrom Visa and the retail version of the card.

The Nordstrom retail card is a closed-loop card, meaning it will only work at eligible Nordstrom retailers. The Nordstrom Visa is a standard Visa card that can be used wherever Visa cards are accepted. The card perks and features are similar between the two. 

The primary criteria for a rewards or cash back card’s rating is its rewards value. This includes the card’s average rewards rate, estimated annual rewards earnings, sign-up bonus value and reward redemption value.

To estimate a card’s average annual rewards earnings, we first calculate its average rewards rate based on how much it earns in different bonus categories and how closely its categories align with the average person’s spending habits, according to the Bureau of Labor Statistics (BLS).

The most recent BLS data estimates average total spending in 2022 was $72,967 per consumer. We then narrow our focus to which purchases are likely to be put on a credit card and earn rewards, subtracting expenditures like housing, vehicle purchases and education. This gives us a total “chargeable” annual spend of around $22,500.  

Some of the major spending categories that contribute towards the annual spend include:

• Groceries: $5,700
• Dining out: $3,600
• Entertainment: $2,400
• Gas: $3,100
• Apparel and services: $1,900

Using this data, we assign a weighting to each of a card’s bonus categories. For example, a card’s grocery rewards rate receives a 22 percent weighting based on how much of the average person’s budget is spent on groceries. We also estimate the redemption value of points or miles from various issuer, airline and hotel rewards programs.

This weighting and rewards valuation allows us to estimate a card’s average annual rewards earnings — how many points or miles you’d earn with a given card if your spending was about average and you used the card for all of your purchases, as well as what those points are worth. We also use point valuations to determine a card’s sign-up bonus value.

With these calculations complete, we assign each card a score based on how its average rewards earnings, sign-up bonus value, rewards rate and redemption value stack up against other rewards cards.

We also rate cards based on how much it costs to keep them in your wallet or carry a balance. 

To start, each rewards or cash back card is scored based on whether it offers an intro APR and how its ongoing APR compares to the rates available on other rewards or cash back cards. 

We also score each card based on how its annual fee influences its overall value. 

We consider a card’s annual fee in two ways — how it ranks relative to the fees you’ll find on other cards in the category and how it impacts a card’s overall rewards value. Cards with an annual fee will always be at a slight disadvantage in our scoring system since annual fees inherently cut into your rewards value, but if a card offers terrific value via its ongoing rewards and perks, it can earn a high score even if it carries a high annual fee. 

With this in mind, we rate a card based primarily on how its ongoing rewards value and ongoing perk value (such as annual credits or bonuses) stack up against other cards in the category when you subtract its annual fee.

We rate each card’s flexibility based on the restrictions it imposes on earning and redeeming rewards and factor this rating into a card’s overall score. 

Flexibility factors include whether a card only allows you to earn a high rewards rate on a small amount of spending or requires you to meet a certain earning threshold before you can redeem rewards. We also examine whether your points are worth less when you redeem for some options versus others and whether a card gives you the flexibility to transfer rewards to airline and hotel partners. 

We also score each card’s set of features – its perks and benefits — against five tiers of features to provide a rating. 

We break down these tiers as follows:

• Tier 1 has less than standard card features (an ultra-streamlined card that offers basic utility and next to nothing in the way of ancillary benefits. 
• Tier 2 includes the benefits you’d expect on standard Visa or Mastercard credit cards, such as free access to your credit score, car rental insurance and $0 liability for fraudulent charges. 
• Tier 3 includes “prime card” or better-than-average card features like cellphone insurance, lost luggage insurance, concierge services and purchase protection. 
• Tier 4 includes luxury features such as airport lounge access, elite status with an airline or hotel and credits for expedited security screening membership programs. 
• Tier 5 includes the sort of exemplary benefits you’ll find on top-tier luxury cards, such as high-value travel credits, cardholder memberships and other unique and valuable perks.