Retail Credit Cards Become A Bigger Ripoff

Retail Credit Cards Become A Bigger Ripoff

August 14, 2014         Written By Bill Hardekopf

Retail credit cards have always carried extremely high interest rates. But a recent study reveals these interest rates have increased over two percentage points in the past few years. The average APR for retail credit cards is now 23.23%.

The survey compared the interest rates for 61 major store credit cards, including cards from Office Depot, Best Buy, Toys R Us and Amazon. Zales credit cards had the highest interest rates in the study, coming in at 28.99%.

As a whole, store cards that could only be used in specific stores carried the higher interest rates. These cards had an average APR of 24.48%. Cards that could be used with other merchants carried an average APR of 21.63%.

One of the reasons why these interest rates are so high is because retailers sometimes offer discounts to people with their store cards. Merchants have to make up that money in some way, and usually that happens through the interest rate. If you are paying 23% interest on an item purchased for a 10% discount, you are actually losing money overall. And by using a credit card, you may be charging more items than you would normally buy.

If you want to combat these high interest rates, make sure you pay off your balance in full before the due date. This will prevent having to pay any interest charges. Ideally, you should already have the money for that purchase so you can pay off your balance a few days after the transaction. Keep up this habit consistently, and you won’t have to worry about the ridiculously-high APRs.

The information contained within this article was accurate as of August 14, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Bill Hardekopf

Bill Hardekopf is the CEO of and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
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