Consumers now pay an average of 30.45% to carry a balance on store credit cards, according to an early September Bankrate survey of 108 store cards from leading retailers.
A 30% interest rate used to be the unofficial ceiling for the highest store cards. But not anymore.
Of the 108 cards Bankrate surveyed, 66 charged more than 30% interest.
You’ll pay 34.99% to carry cards from Macy’s, Nordstrom, JCPenny and TJ Maxx. The highest annual percentage rate was 35.99% — charged by companies such as Petco, Burlington, Big Lots and Michaels.
“These are rates that we used to think of for people with really, really low credit scores,” said Ted Rossman, Bankrate’s senior credit card industry analyst.
“Store cards charge everybody the same rate — take it or leave it. It’s 34% or 35% for everybody,” he said.
The season for big spending is around the corner, and major retailers — from home improvement warehouses to department stores — will likely be ramping up promotions, including for new credit cards.
But don’t fall into a trap and apply for one of these cards impulsively at the checkout counter, Mr. Rossman said.
“It’s fine to say ‘no’ or ‘not right now’ or ‘I’m going to think about it’,” Mr. Rossman said. “The retailer might dangle 10% off today’s purchase if you sign up, but it’s not worth it if you’re going to pay a 30% interest rate for years to come.
“Be absolutely sure that you can pay in full before interest hits,” he said.
