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Retail credit card APRs are on the rise. Should you get one anyway?

We’ve all had the shared experience of checking out at a retail store and having a store associate ask if you’d like to apply for a store credit card for an additional percentage off your purchase.

It’s a tempting offer—especially if you’re a regular. But large cards are still credit cards. They come with several perks, as well as serious risks if you’re not managing your card responsibly.

What is a retail credit card?

A retail credit card, or a store card, is a credit card offered by a retailer (sometimes in partnership with a credit card network like Visa or Mastercard).

Some retail credit cards can only be used for purchases made at that particular store, except in the case of co-branded credit cards that are often widely accepted. The unique perk of having a retail card is that they are tailored to reward your spending at a specific store or chain of stores. For shoppers who have a select few favorite stores, having a retail credit card can cut costs tremendously and reward spending they already plan to do.

How to know if a retail card is right for you

It’s not wise to jump on every credit card offer that comes your way, however, there are some instances when signing up for a retail card could make sense.

“It may make sense to get a store card if you frequently shop at that store and can take advantage of exclusive discounts and rewards offered by the card or if you are doing a single large purchase and can receive a sizable promotional discount for signing up for the card,” says Liz deSousa, certified financial planner, CDFA, and Senior Financial Advisor at Running Point Capital Advisors.

Also, if you’re hoping to build or repair your credit, retail credit cards tend to have lower credit score requirements than traditional cards (as well as lower credit limits).

The downside: the interest rates are hitting record highs. According to’s annual retail credit cards study, the average APR for a retail credit card hit a record high of 26.72% in 2022.

According to the most recent figures from Experian, average balances for retail card borrowers hit $1,046 in Q3 of 2021. Say you carry a balance of $1,046 at an APR of 26%, if your minimum payment is equal to your interest plus 1% of your overall balance, your minimum payment would be $33.12 per month. That means it would take you 133 months to pay off your balance and by that time you will have paid $1,572.96 in interest charges.

Pros and cons of retail credit cards

Not all retail cards are built the same, so it’s important that you read the fine print on the card you’re interested in before deciding if it’s right for you. If you’re on the fence about getting a retail card in general, consider the following pros and cons.


Tempting sign-up bonuses. Retail credit cards tend to come with a sign-up bonus such as a certain percentage off your first purchase or a free gift with purchase. When you’re at the check-out counter and you’re faced with a large total, signing up for a credit card to trim your total amount due or get more bang for your buck with a free item could relieve some of the pressure on your wallet.

Access to exclusive discounts and promotions. It’s common for retail cardholders to receive alerts informing them of exclusive discounts or promotions. If you’re a regular shopper at a particular store, being the first to know about ways to save can come in handy.


Retail credit cards can carry steep interest rates. Retail cards are leading the way in terms of rising APRs, and carrying a balance from month to month could cost you tons in interest over time.

You could find yourself overspending to make the most of your credit card perks. Where traditional credit cards reward your regular spending, retail cards tend to tailor their rewards structure to the specific store offering the card, so you could find yourself spending on items you don’t actually need to make the most of those rewards.

The takeaway

Credit cards can make it easier to spread out payments over time and build a positive credit history. However, you should be selective about which cards you’re adding to your wallet and carefully review the fees, interest rates, and rewards structures of each card to determine if signing up makes sense for you.

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