Retail credit card rates hit record high
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Interest rates are continuing to climb just as the holiday shopping season is approaching, making it more costly for shoppers who plan to charge using store cards.
The average retail credit card annual percentage rate (APR) hit a new record high of 28.93% this year, up from 26.72% in 2022 and 24.35% in 2021, according to Bankrate’s annual Retail Cards Study out Monday.
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Many retailers offer point programs and member perks if you use a store credit card but if you can't pay it off in full it'll cost you.
The average store-only credit card charges 30.24%, noted Ted Rossman, senior industry analyst with Bankrate.com. These figures are well above the national average for all credit cards, he says, which clocks in at 20.71%.
Opening a store card and not using it won't cost you but will likely factor into your FICO score.
A monitor displays Fair Isaac Inc. (FICO) signage on the floor of the New York Stock Exchange (NYSE). (Michael Nagle/Bloomberg via / Getty Images)
If you ever carry a balance, a retail credit card probably isn’t the best choice for you, given the exceptionally high interest rates that most of these cards charge, Rossman says. «If you can pay in full and avoid interest, a retail credit card could make sense if you’re loyal to the store,» Rossman told FOX Business.
For example, Rossman says, Amazon, Target, Best Buy and others give 5% cash back when you use their credit card at their store. «That can add up for a loyal shopper, and it’s likely more than they would earn on a general-purpose card,» he adds.
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Shopping carts are lined up inside a Target store on Aug. 16, 2023 in Chicago. (Scott Olson /
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