Most retail store card applications happen at the checkout

Shopping with a retail credit card this holiday season could make you as grumpy as the Grinch.

CreditCards.com’s annual survey of retail credit cards shows that the average annual interest rate (APR) for a retail credit card hit an all-time high of 26.72 percent, up from 24.35 percent last year. In comparison, the average annual interest rate on a general purpose credit card is 22.66%.

The average store-only credit card is 28.22% (compared to 25.77% last year), while the average retail co-branded card is 25.01% (compared to 22.12% in last year), according to the study.

As the annual interest rate rises, retail cards become more expensive than ever

Ted Rossman, senior industry analyst at CreditCards.com, said these higher average annual interest rates potentially cost retail cardholders about $1.6 billion in additional interest payments, assuming cardholders make only the minimum monthly payments. According to credit bureau Equifax, this is based on outstanding balances on branded credit cards totaling $64.9 billion as of August 2022.

Historical average annual interest rates for retail credit cards

Year per annum
2022 26.72%
2021 24.35%
2020 24.43%
2019 26.01%
2018 25.64%
2017 24.99%
2016 23.84%
2015 23.43%
2014 23.23%
2013 No poll
2012 No poll
2011 No poll
2010 21.22%
2009 20.08%
2008 18.14%

Source: CreditCards.com research.

Eleven cards in this year’s study have a top annual interest rate of 30.74 percent, including the Speedy Rewards Mastercard, Kroger Rewards World Elite Mastercard, and cards offered by nine Kroger affiliate brands. However, some consumers who subscribe to these cards may qualify for lower rates depending on their creditworthiness.

Store-only credit cards from Big Lots, Discount Tire, Jared, Kay Jewelers, Piercing Pagoda, Sterling Family of Jewelers and Zales shared the highest APR of 29.99% last year and have remained the same this year . Another 17 cards, including those offered by BrandSource, Burlington and Wayfair, advertise the same fare. All of these cards charge the same high rate to all customers who have balances, regardless of their credit score.

Lowest APR for Retail Cards in 2022*

Card Average annual
Secure Amazon Card ten%
military star map 13.99%
Citi Costco Anywhere Visa 18.24%
Casey Visa Subscription Card 18.99%
Bass Pro Shops Club Card 19.24%
Apple Card 19.49%
Amazon Rewards Visa Subscription Card 21.24%
Bed Bath & Beyond Mastercard/World Mastercard 21.99%
Credit card IKEA Project 21.99%
IKEA Visa 21.99%
Good Sam Camping World Visa / Visa Signature 22.49%
Good Sam Rewards Visa/Visa Signature 22.49%

Source: CreditCards.com, 2022 Retail Credit Card Survey

* The annual interest rate for some cards depends on the client’s creditworthiness.

Rossman said the 29.99% “seems to be an important psychological barrier” to retail card APRs.

He explained that by law, most credit cards can charge higher interest rates because card issuers tend to open stores in states that don’t cap rates, such as Delaware, South Dakota and Utah.

“From a consumer perspective, 29.99% is still an astronomical norm,” Rossman said.

If you charge $1,000 and only make the minimum payments of 29.99 percent, you’ll be in debt for 51 months and end up paying a total of $775 in interest, according to Rossman. But the possibility of staggering interest payments doesn’t stop many consumers. A survey last year by CreditCards.com found that 68% of consumers who applied for a retail credit card did so impulsively at least once.

Considering a retail card? Proceed with caution

Rossman said the zero APR promotions for retail cards are attracting a significant number of consumers. Card issuers refer to them as “deferred interest” offerings. Transfer: If you do not pay the full amount before the end of the 0 percent promotion, the card issuer will retroactively charge you all the interest that you would have received from the very beginning. This is a common tactic for retail cards, he says, but not for general purpose cards.

However, Rossman added, retail cards “are not that bad.”

“Assuming you can pay your bills in full and avoid interest, rewards can be attractive if you’re loyal to the store,” Rossman said, citing examples such as 5 percent cashback at Amazon.com, Best Buy and Lowe’s.

However, Rossman advises caution when considering whether to apply for a retail credit card.

“There is a good chance you will be offered a retail credit card this holiday season. Don’t give in to pressure to make the wrong decision at the checkout,” he said. “To begin with, any rewards will only make sense if you can pay your bills in full and avoid interest.”

“You also need to shop at the store quite often for the rewards to be worth it,” Rossman added. “In many cases, it would be better to get a general purpose credit card instead. They generally offer more flexibility, more generous rewards, and better interest rates.”

According to the Consumer Financial Protection Bureau, a key benefit of retail credit cards is that they are usually easier to get than general-purpose credit cards, even if you have bad or limited credit. If you make regular, timely payments, a retail card can help you build or improve your credit, the bureau says.

In addition, these cards often provide rewards and other perks.

However, the bureau points out that one of the disadvantages of retail cards is that the APR can be higher than for general purpose cards. In addition, you may face significant interest rates if you do not pay your balance in full each month or if you do not wipe out your balance before the promotional annual interest rate expires.

In addition, the National Credit Counseling Foundation highlights that retail cards often have low credit limits, which may not improve your credit score as much as cards with higher credit limits. A higher credit limit can improve your credit score by improving your credit utilization ratio, which is a key factor in calculating your credit score.

bottom line

A retail credit card may offer you the opportunity to buy a high-value item, pay for it over time without interest, and possibly earn some rewards. But with the average APR for store cards approaching the 30 percent mark, tread lightly and take the time to consider a general purpose card with a zero APR as an alternative.

“The decision to open a credit card should never be taken lightly, but much of the store card marketing tries to catch consumers off guard and make them make rash decisions,” advises the NFCC. “If you open a retail card, it’s certainly not the end of the world, but ideally you should think before you say yes.


CreditCards.com conducted interest rate research on November 4, 2022 using public disclosure terms and conditions for 94 cards (50 store-only cards and 44 co-branded cards). Each of the top 100 retailers (as defined by the National Retail Federation based on 2021 sales) offering a credit card program was selected for the study.

Editorial disclaimer

The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.

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