John Lewis will take Visa and Mastercard in its 25 stores from 27 September. They now accept only debit and switch cards and the group's own credit card. John Lewis accepts branded cards at Waitrose supermarkets.
Sir Stuart Hampson, chairman, said: "We have made the decision now because more people are ordering goods by phone and credit-card payments are easier for that. More people are also ordering via the Internet."
He said there may also be a "generational shift" with younger customers expecting to shop with plastic.
The decision was welcomed by retail experts. Mike Godliman of Verdict, the consultants, said: "A lot of customers will be very pleased. John Lewis has been one of the last to hold out on this and its decision will raise the pressure on M&S to follow suit."
However, John Lewis said it had no immediate plans to open its stores on Mondays or extend its Sunday opening, restricted to a handful of stores.
The decision came as the company announced a 22 per cent drop in first- half profits to pounds 77m. The main cause was a decline in profits at the department stores; they were hit by weak spending on furnishings, which account for two-thirds of sales. The company has seen some improvement in recent weeks.
John Lewis is fighting a call from some staff to "demutualise" its partnership structure and distribute the proceeds to staff. A sale could lead to windfalls of pounds 70,000 to pounds 100,000 for each of the 39,000 workers.
This will be discussed at the group's central council meeting next week. However, Sir Stuart repeated his pledge that "the partnership is not for sale".
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