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“If you think a retail store’s credit card will save you big bucks, reread the terms, and reconsider. “ Like
2016 Retail Card Survey: APRs climbing, sign-up deals fading
Purchase APRs inch closer to 30 percent after only one Fed rate increase
If you think a retail store’s credit card will save you big bucks, reread the terms, and reconsider. Higher interest rates and skimpier sign-up offers have reduced their value, a new CreditCards.com survey shows.
The average APR on America’s largest retailer credit cards has risen to 23.84 percent and only half of the cards offer a sign-up rewards deal or purchase discount, says our survey of all store credit cards offered by the largest U.S. retailers.
Retailer cards remain valuable to people seeking to build or rebuild credit, but those with good credit can find better deals, our research finds.
“To me, the rewards for mainstream cards usually beat the rewards on a store card,” said Atlanta-based financial planner Karen Lee.
CreditCards.com gathered data on every card offered by the top 100 retailers in the United States. Not every retailer offers a card, but many do. Some offer more than one. In all, we surveyed 68, including: 42 store-only cards, 24 general purpose (co-branded) cards and two debit cards. To see individual cards’ data from the latest survey, see CreditCards.com’s 2016 retail credit card survey data.
Nearly half of retail-branded cards carry an APR of at least 25 percent. That’s much higher than 15.18 percent, the current national average rate for all credit cards. A Fed rate hike in 2015 pushed rates up 0.25 percent, but the average retail card rate has risen more. Retail cards’ average rates have risen steadly, from 23.23 percent in our 2014 survey, to 23.43 percent in 2015, to 23.84 now.
New cardholder deals are weaker. Ten cards dropped new cardholder sign-up offers in the past year, and only 13 cards boast limited-time, low-to-no interest purchase rates.
Store cards aren’t very secure or high-tech. Only 29 cards in this year’s survey are currently issued with EMV chips, and only seven are compatible with at least one major mobile wallet.
Reward programs, financing offers are best for regular shoppers or large purchases. Brand-loyal shoppers and those making infrequent, large-dollar purchases are best suited for store cards and their reward offerings. Occasional shoppers should look elsewhere for credit.
(Information continues at: http://www.creditcards.com/credit-card-news/retail-card-survey-2016.php)