Study: Interest rates of retail credit cards at record high
The average interest rates of credit cards that can be used only at a particular retailer continues to rise.
The average APR for retail credit cards is at a record-high 30.45%, up from 28.93% last year and 24.35% in 2021, according to Bankrate’s annual Retail Cards Study. The average store-only credit card charges 31.80%, up from 30.24% last year, while the average co-branded credit card charges 29.09%, up from 27.64% last year. (Co-branded cards have a retailer’s name but also carry a Visa, Mastercard or American Express logo and can be used anywhere those cards are accepted.)
By comparison, the national average for all credit cards currently sits at 20.78%, according to Bankrate. Of the 108 cards that Bankrate surveyed, 66 charge an average interest rate over 30%.
"Thirty percent used to represent an unofficial ceiling for retail credit card rates, but now most retail cards have crossed that threshold,” said Bankrate senior industry analyst Ted Rossman.
The highest retail credit card APR in Bankrate’s study is 35.99%, which includes retail credit cards from Academy Sports + Outdoors, Petco, Burlington, Piercing Pagoda, Good Sam, Big Lots and Michaels.
There are 13 retail credit cards that charge 34.99% to all cardholders who carry balances, including seven store-only cards and six co-branded cards. These include Athleta, Banana Republic, Nordstrom, JCPenney, Old Navy, American Eagle, T.J. Maxx, HSN, Walgreens, QVC and Tire Rack. Of the 108 cards that Bankrate surveyed, 66 charge an average interest rate over 30%.
The lowest retail credit card APR is 10.00% on the Amazon Secured Card followed by the Military Star card at 15.49% (limited to military exchanges, commissaries, and related websites).
The Federal Reserve’s rate hikes over the past few years have contributed to rising retail card rates, but these rates are considerably higher than those on bank-branded credit cards, which can primarily be attributed to retail cards being less selective about credit quality, noted Bankrate.
Methodology
Bankrate surveyed 108 retail credit cards on Sept. 3, 2024, using publicly available terms-and-conditions disclosures. It included each of the 100 largest retailers, as defined by the National Retail Federation based on 2023 sales, that offer credit card programs.
The sample included 54 co-branded cards and 54 store-only cards. When a card offered an APR range, Bankrate included the midpoint of the range in the overall averages.
