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Interest rates continue to rise as the holiday shopping season approaches, making it more expensive for shoppers who want to pay with store cards.

The average annual percentage rate (APR) for retail credit cards hit a new record of 28.93% this year, up from 26.72% in 2022 and 24.35% in 2021, according to the annual Retail Cards study released Monday Bankrate.

Retail charging cards

  • The APR of 28.93% is well above the national average, which is 20.71%.
  • The highest retail credit card APR is 33.24% for the Academy Sports + Outdoors Credit Card, Burlington Credit Card, Good Sam Rewards Credit Card and Michaels Credit Card
  • 16 retail credit cards charge 32.24% to all cardholders who carry balances, including those from Jared, Kay Jewelers, Zales, owned by Signet Jewelers, QVC, Walgreens, Ross, Victoria’s Secret, TJ Maxx and Wayfair

Americans’ wealth after the pandemic

ticker Security Last Change Change %
SIG SIGNET JEWELERS LTD. 71.72 -2.01 -2.73%
RUST ROSS STORES INC. 115.66 -0.60 -0.52%
VSCO VICTORIA’S SECRET & CO. 12/19 -0.33 -1.70%
TJX THE TJX COS. INC. 89.10 -0.73 -0.81%
W WAYFAIR INC. 43.87 +0.11 +0.25%

Should people think twice about opening a business-only credit card?

Many retailers offer points programs and member perks when you use a store credit card. However, if you cannot pay them off in full, you will incur costs.

According to Ted Rossman, senior industry analyst at, the average fee for store credit cards is 30.24%. These numbers are well above the national average for all credit cards, which is 20.71%.

While opening and not using a store card won’t cost you anything, it will likely impact 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)

When might a store credit card be a good choice?

If you ever find yourself carrying a balance, a personal credit card probably isn’t the best choice given the exceptionally high interest rates that most of these cards charge, says Rossman. “If you can pay in full and avoid interest, a retail credit card might make sense if you’re loyal to the store,” Rossman told FOX Business.

ticker Security Last Change Change %
AMZN AMAZON.COM INC. 125.17 -3.23 -2.52%
TGT TARGET CORP. 108.83 +0.47 +0.43%
BBY BEST BUY CO. INC. 68.68 -0.82 -1.18%

For example, Rossman says Amazon, Target, Best Buy and others offer 5% cash back when you use their credit card at their store. “That can add up for a loyal shopper and is likely more than they would earn on a general-purpose card,” he adds.

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Shopping carts are lined up at a Target store on August 16, 2023 in Chicago. (Scott Olson/Getty Images)

According to Rossman, another useful case could be getting a significant discount on your first purchase. “This is a common sign-up bonus for loyalty cards,” he says. “I have a colleague who saved 10% on new equipment purchases using this approach.”

Experts advise you to reconsider your decision to open a loyalty card and do it only if you plan to pay off the balance in full and on time. “Don’t make a bad decision in the heat of the moment that will land you interest rates over 30%,” warns Rossman.


Why are Americans drowning in credit card debt?

As the Federal Reserve raises interest rates to combat inflation, the combination has led to higher borrowing costs for many Americans. The yield on the benchmark 10-year Treasury note is near 5%, meaning the cost of things like mortgages is rising.

Rossman explains that people tend to run up credit card debt for very practical reasons – either because of an emergency expense, an unexpected medical bill, a home or car repair, or just everyday expenses that exceed their paycheck. “The latter has been particularly common in recent years due to high inflation,” Rossman tells FOX Business. “Many people use credit cards to finance everyday necessities such as groceries and gas. Unfortunately, it’s easy to get into credit card debt and difficult to get out of.”

“Credit card debt is easy to get into and hard to get out of,” warns one expert. (iStock / iStock)

Overall, the average credit card balance is $5,947, according to TransUnion. At an average interest rate of 20.72%, someone making minimum payments would be in debt for 212 months and accrue $8,819 in interest, according to Bankrate. “Monthly payments would start at $162 and decrease with the remaining balance,” explains Rossman. “This highlights how dangerous it is to only make minimum payments. Pay everything if you can.”

ticker Security Last Change Change %
M.A MASTERCARD INC. 384.41 -3.46 -0.89%
v VISA INC. 233.38 -0.43 -0.18%

Even though limits tend to be lower on retail credit cards, there are still concerns, he says. “Even a $1,000 purchase with a 30% minimum payment would keep someone in debt for 51 months and cost $776 in interest,” explains Rossman.

What can you do if you can’t make your payments?

If you find yourself in a situation where you are having trouble making your credit card payments, you have options. Consider the following:

  • Prioritize your spending. Corina Cavazos, director of business growth strategy at Dallas, Texas-based Wells Fargo, recommends making a list of all your monthly expenses in two categories: needs and wants. Your “needs” are the absolute must for survival. “For example: food, shelter, transportation, electricity and insurance,” Cavazos told FOX Business. “Wants” are the things that are still important to you but that you could live without, including monthly subscriptions, memberships, entertainment and travel, she says.
  • Calculate your take-home salary. “From this number, subtract the total cost of your ‘needs.’ The difference shows you the amount, which gives you the opportunity to redirect that money to your credit card payments,” she says. “You’ll probably be surprised at how canceling some subscriptions can free up money that can be used to pay off credit card debt.”
  • Cut up credit cards. If your credit cards are reaching their limit or even have remaining balance and you’re working out a plan to pay it off, Cavazos says destroying your credit cards will help you avoid the temptation to use existing credit to make an impulse purchase while you pay off your balance. However, experts say it’s always wise to save a credit card for emergencies like a car repair, a job loss or a medical emergency.
  • Use credit counseling. There are resources to help you as you try to get your debt under control. Work with a reputable nonprofit credit counseling agency like Money Management International, advises Rossman of


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