Retail Credit Cards Charge Much Higher Interest Rates

Interest Expenses Far Outweigh Incentives for Those Who Carry a Balance

Aug 07, 2014, 08:30 ET from

AUSTIN, Texas, Aug. 7, 2014 /PRNewswire/ -- The average APR of credit cards issued by America's largest retailers is 23.23%, more than eight percentage points higher than the national average for all credit cards, according to The highest APRs are charged by Zales (28.99%), Office Depot (27.99%) and Staples (27.99%).

The average retail credit card charges more than twice as much as the average low-interest credit card. Those higher rates can mean big costs for consumers. Here's why:

  • If a consumer has a $1,000 balance on the average retail credit card and makes only the minimum payments, it would take the cardholder 73 months to pay off the balance and he/she would incur $840 in interest fees.
  • The interest expense drops to $396 at the national average APR of 15.03% for all credit cards. And the payoff time drops to 56 months.
  • At the average low-interest APR of 10.37%, the interest falls to $232 and the payoff time shrinks to 50 months.

That means someone who uses the average low-rate card rather than the average retail card would save more than $600 and be out of debt 17 months sooner. "Retailers dangle incentives like 15% off a purchase to encourage consumers to sign up for their credit cards," said Matt Schulz, senior industry analyst, "But this often ends up being a bad deal. The much higher interest rates far outweigh the one-time discount for anyone who carries a balance."

Cardholders who pay their balances in full each month can find value in retail rewards programs. The number of programs is on the rise and multiple tiers are being added to encourage loyalty (and spending). Of the 36 surveyed retailers, 22 offer introductory financing rates, instant rewards or both. Retailers are adding cardholder-only specials, too.

More than two-thirds of the retailers that analyzed offer credit cards that can be used anywhere, not just at the issuing retailer's locations.

In 2010, the average APR for retail credit cards was 21.22%.

More information is available here: surveyed the 36 retailers from the National Retail Federation's Top 100 Retailers of 2014 list that offer credit card programs. The analysis included APRs, co-branded offers and rewards programs. The selected retailers offer 61 cards within their consumer card programs: 32 store-only cards, 27 co-branded (use-anywhere) cards and two debit cards.

About, named a "Best Site for Managing Your Credit" by MSN Money, is a leading online credit card marketplace, bringing consumers and credit card issuers together. At its free website, consumers can compare hundreds of credit card offers from America's leading issuers and banks and apply securely, online. is also a destination site for consumers wanting to learn more about credit cards. Offering advice, news, features, statistics and tools, helps consumers make smart choices about credit cards. In 2013, 19.5 million unique visitors used to find the right credit card to suit their needs.

For More Information:
Ted Rossman
Public Relations Manager