Nearly Half Of Americans Who Have Gotten A Store Card Have Regretted Getting One

New CompareCards Report Shows Average Store Card APR Near 25%

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Oct 18, 2018, 10:00 ET

CHARLOTTE, N.C., Oct. 18, 2018 /PRNewswire/ -- CompareCards by LendingTree today released the findings of its study on store credit cards that revealed nearly half of Americans who have had a store credit card regretted getting one. CompareCards reviewed credit cards from 50 of the nation's largest retailers and found that the average store card APR is nearly 25 percent.

Key findings

Three out of 4 Americans have had a store card, and half of those who have had a card regretted getting one.
The average APR for a store credit card is 24.97 percent.
Only 1 store card had an APR below 10 percent, while 4 store cards had APRs of 29.99 percent or higher.
88 percent of "special financing" offers come with a big catch: deferred interest.

3 out of 4 Americans have had a store credit card — and half of them regret getting one

Seventy-four percent of Americans have had a store card before, and one in three Americans have at least two right now. However, 47 percent of Americans who have had a store card said they've regretted getting one.

Among the most likely to have regretted getting a store card: Parents with kids under 18 (59 percent said they've regretted) and Generation X (59 percent).

The average APR for a store credit card is 24.97 percent

That's more than 8 percentage points higher than the average APR that Americans pay on their credit card debt — 16.46 percent, according to the latest numbers from the Federal Reserve.

While most general-purpose credit cards come with a range of possible APRs based on the applicant's creditworthiness, 46 of the 68 store cards came with a single possible APR. The average for those cards: 26.80 percent.

Only 1 store card had an APR below 10 percent, while 4 store cards had APRs of 29.99 percent or higher

Of all the 68 cards CompareCards reviewed, just one featured an APR in the single digits, and that was only for purchases made at that retailer. Meanwhile, one card came with a single APR that topped 30 percent – the type of rate usually reserved for those being penalized for late payments – and three others were just a tick away.

To see the list of the cards with the five highest and lowest APRs found, visit https://www.comparecards.com/blog/store-credit-card-study/.

88 percent of "special financing" offers come with a big catch – deferred interest

Nearly 90 percent of the 25 cards reviewed that came with so-called special-financing offers came with deferred interest clauses. That means cardholders who aren't able to pay their balance in full during an interest-free introductory period (often 0 percent for anywhere from six to 24 months) would find themselves facing sky-high interest rates once that period ended.

Other highlights:

Nearly half of Americans (48 percent) say they're "highly unlikely" to apply for a store credit card this holiday season.
Two-thirds of Americans (66 percent) agreed with the statement "Store credit cards typically charge higher APRs (or interest rates) than other credit cards."
82 percent of store cards came with some perk for signing up; the most common was a discount (either a set dollar amount or a percentage) on your first purchase with the card.

"If you carry a balance from month to month, store credit cards aren't for you, period," said Matt Schulz, Chief Industry Analyst at CompareCards. "That 20 percent discount may sound like a great deal, but those sky-high APRs can easily outweigh that discount if you're not careful. Just remember: It doesn't make sense to pay 25 percent in order to save 20 percent."

To view the full report, visit https://www.comparecards.com/blog/store-credit-card-study/.

About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online marketplace that connects consumers with the choices they need to be confident in their financial decisions. LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 500 partners in one simple search, and can choose the option that best fits their financial needs. Services include mortgage loans, mortgage refinances, auto loans, personal loans, business loans, student refinances, credit cards and more. Through the My LendingTree platform, consumers receive free credit scores, credit monitoring and recommendations to improve credit health. My LendingTree proactively compares consumers' credit accounts against offers on our network, and notifies consumers when there is an opportunity to save money. In short, LendingTree's purpose is to help simplify financial decisions for life's meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

About CompareCards:
CompareCards' mission is to help people make smarter, more informed, healthier financial decisions based on deeper knowledge of financial offers. Each month, over 2.9 million visitors come to CompareCards' website to independently compare credit cards side-by-side and choose a credit card based on interest rate, reward benefit, cost savings, and other factors that are important to each person. CompareCards provides easy-to-use, objective tools and educational resources that help people do everything from making credit card comparisons to managing their credit health. For more information, please visit www.comparecards.com.

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SOURCE CompareCards