Retail credit card APR rises to record highs, tops 30%

Ahead of the holiday shopping season, credit card interest rates hit record highs

Ahead of the holiday shopping season, credit card interest rates hit record highs


Swipe-happy shoppers beware: The enticing retail credit cards from your favorite merchants could be putting a bigger dent in your wallet than ever before.

Bankrate’s annual retail map shows this examination showing that the annual percentage rate (APR) on retail credit cards this year has hit a record high of 28.93% on average, up from 26.72% in 2022. That’s well above the average APR of 21.19% for all credit cards, the survey shows.

The rising APRs come as the Federal Reserve continues to raise the interest ratewhich indirectly raises the cost of borrowing for consumers and encourages credit card companies to raise their cards’ interest rates as well, Ted Rossman, Senior Industry Analyst at, said in a statement.

Card companies encouraged by Fed hikes

“[An APR of] 29.99% was an artificial barrier that few dared cross — mostly for psychological reasons, but the market has been blown past that threshold by the Fed’s aggressive series of rate hikes,” Rossman said.

Bankrate surveyed 107 retail credit cards in mid-September 2023 using publicly available terms and conditions. The study includes each of the top 100 retailers that offer cards, as defined by the National Retail Federation based on 2022 sales. For cards that offer an APR range, the midpoint of that range was used to calculate the average APR for all credit cards.

Retail credit cards are cards offered by a specific retailer alone or in partnership with a major bank that offer customers rewards for shopping at their stores, according to Bank rate. But while the cards may offer benefits to frequent shoppers who are able to pay off their card balance right away — to avoid interest — those same cards can cause a lot of harm to cardholders who charge interest on unpaid balances.

“If you ever carry a balance, a retail credit card probably isn’t the best choice for you,” Rossman said.

Drowning in debt

According to Rossman, if a credit card holder finances a $1,000 purchase at the average retail card interest rate of 28.93% and makes only minimum payments, that cardholder will owe $715 and be in debt for 50 months.

Most Americans are already in debt as they take on more credit card debt as they struggle with rising inflation, according to data from the Federal Reserve Bank of New York. Actually, Americans are buried in nearly a trillion dollars in credit card debt now nearly a record tua owe a combined $986 billion on their credit cards, or 17% more than they owed last year, the same data shows.

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Sky high APR

Sixteen retail credit cards charge an APR of 32.24%, according to Bankrate’s survey, some of which include the Banter by Piercing Pagoda Card, the HSN Credit Card, the Ross Mastercard, and the Wayfair Mastercard.

Two co-branded cards – myWalgreens Mastercard and Ultamate Rewards Mastercard – follow a graduated approach with rates ranging from 23.24% up to 32.24%.

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