Applications Rising for Store Credit Cards
More Americans applied for store credit cards in 2019 than they did in 2018, according to a new study focused on holiday shopping experiences. Approximately 37% of Americans applied for a retail credit card over the 2019 shopping season compared to just 28% the year before. Only 6% of applicants said they were denied for a card.
Nearly half (45%) of shoppers said they applied for a store card to take advantage of a special discount. Another 27% said they would not have funds otherwise to cover their purchases, and 14% said they felt pressure from the cashier to apply. Men were almost twice as likely as women to apply for a store card: 40% vs. 22%.
Store credit cards typically have a very high interest rate which should be a major concern for consumers. This study found the average store credit card had an APR of 25.41%.
Well before the holiday shopping season, Americans were already stressed about holiday debt: 42% of shoppers said they were worried about stretching their budget to accommodate their costs. Entering the new year, only 28% of new store cardholders plan to pay off their card balances within one month. That is down from 49% the year prior.
For many, the solution to lingering holiday debt may be just around the corner. A Jackson Hewitt study from last year found that 41% of Americans planned to use their tax refunds to pay down holiday bills.