In the rush at the store checkout this holiday season, you may be tempted to say yes when asked if you want to apply for a store credit card — especially if you’re offered extra savings on that day’s purchase. It may help in the long run if you resist accepting an offer at checkout on the spur of the moment and instead dig deeper into the terms and conditions before signing up.
Soaring interest rates could mean you’ll ultimately pay more than you save from any perks a store brand offers. The average retail credit card charges a 26.72% annual percentage rate, with a high of 30.74% which measures how much it will cost per year if you carry a balance, according to a recent analysis by CreditCards.com.
Also, variable credit card interest rates have recently climbed to 19.14%, according to Bankrate.com. The higher rates come as all kinds of borrowing has become more expensive as the Federal Reserve works to combat record high inflation.
The CreditCards.com survey also reported that store-only credit cards are now charging an average of 28.22%, while retail co-branded cards are charging an average of 25.01%,
Those that may charge maximum APRs of 30.74% include the Speedy Rewards Mastercard, Kroger Rewards World Elite Mastercard and nine brands associated with Kroger, Other store-only cards may charge 29.99%, including Big Lots, Discount Tire, Jared, Kay Jewelers, Piercing Pagoda, Sterling Family of Jewelers and Zales, CreditCards.com reports.
Bottom line – think twice – what is usually too good to be true usually is.