Retail credit card interest rates record high, analysts say

The holidays are just around the corner and many of the places where you’ll be shopping this season will offer discounts to customers who sign up for a store credit card.

Action 9 investigates whether the immediate savings are worth it in the long run.

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Many of the stores offer credit cards. According to, the average interest rate for store credit cards was 24.35% last year and 26.72% this year.

More specifically, if you divide retail credit cards into two categories, says those you can only use in the store that issued it went from 25.77% last year to 28.22% this year, and “co-brand” credit cards you can use for other purchases went from 22.12% to 25.01%.

( says the interest rates on regular, or general-purpose cards such as American Express, Mastercard and Visa are up too, from 19.92% last year to 22.66% now.)

“Within the next couple weeks, I think we’ll set an all-time record because that Fed hike from last week is going to be enough to push us over the top,”’s Ted Rossman told Action 9′s Jason Stoogenke.

The company found many cards are charging 29.99%.

Stoogenke did the math on 29.99%: If you charge $1,000 and only make minimum payments, you would end up paying $775 in interest and paying it off for 51 months.

“You could be paying that more than four years from now and you’re going to owe almost as much in interest as you charged in the first place,” Rossman said.

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Rossman isn’t against getting a retail credit card, but he says shoppers need to know what they’re signing up for:

- Maybe the discount when you sign up is worth it, maybe not.

- They can work well for you if you pay them off in full each time.

- If it says no interest for 12 months, make sure you understand the rules surrounding that. If you don’t follow them exactly, you could end up owing all that interest in some cases.

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