2016 Retail Card Survey: APRs climbing, sign-up deals fading


We surveyed all the cards from the top 100 retailers, and nearly half carry rates higher than 25 percent

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If you think a retail store’s credit card will save you big bucks, reread the terms and reconsider. Higher interest rates and skimpier sign-up offers have reduced their value, a new CreditCards.com survey shows.
The average APR on America’s largest retailer credit cards has risen to 23.84 percent and only half of the cards offer a sign-up rewards deal or purchase discount, says our survey of all store credit cards offered by the largest U.S. retailers.

Retailer cards remain valuable to people seeking to build or rebuild credit, but those with good credit can find better deals, our research finds.

“To me, the rewards for mainstream cards usually beat the rewards on a store card,” said Atlanta-based financial planner Karen Lee.

CreditCards.com gathered data on every card offered by the top 100 retailers in the United States. Not every retailer offers a card, but many do. Some offer more than one. In all, we surveyed 68, including: 42 store-only cards, 24 general purpose (co-branded) cards and two debit cards. To see individual cards’ data from the latest survey, see CreditCards.com’s 2016 retail credit card survey data.

Research highlights:

  • Nearly half of retail-branded cards carry an APR of at least 25 percent. That’s much higher than 15.18 percent, the current national average rate for all credit cards. A Fed rate hike in 2015 pushed rates up 0.25 percent, but the average retail card rate has risen more. Retail cards’ average rates have risen steadly, from 23.23 percent in our 2014 survey, to 23.43 percent in 2015, to 23.84 now.
  • New cardholder deals are weaker. Ten cards dropped new cardholder sign-up offers in the past year, and only 13 cards boast limited-time, low-to-no interest purchase rates.
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  • Store cards aren’t very secure or high-tech. Only 29 cards in this year’s survey are currently issued with EMV chips, and only seven are compatible with at least one major mobile wallet.
  • Reward programs, financing offers are best for regular shoppers or large purchases. Brand-loyal shoppers and those making infrequent, large-dollar purchases are best suited for store cards and their reward offerings. Occasional shoppers should look elsewhere for credit.

(See survey methodology).

Rates continue to rise
It’s not unusual for retail-branded credit cards to have higher interest rates than regular general purpose cards. When CreditCards.com first looked at retail-branded credit cards in 2010, the highest recorded store card rate was 27.99 percent. This year, the highest surveyed store card rate was 29.99 percent, nearly 15 percent higher than the current national average.

“If you pay the card off every month, then the APR doesn’t even matter. But many don’t do that,” said Lee. According to the American Bankers Association, about 4 in 10 cardholders revolve balances each month.

If you don’t consider general purpose cards, the rates are even higher. The one-store-only cards have an average purchase rate of 25.22 percent.

Why store cards’ rates are higher
The high APRs of store cards can be attributed to several factors: lower credit limits, higher-risk applicants and variable rate APRs tied to the prime rate.

“From a card issuer’s perspective, the balances and the actual credit lines of store cards are much lower, maybe only $500 or so,” explains Tiffani Montez, retail banking senior analyst at Aite Group. “So typically when there’s a lower credit line, [issuers] have to be able to monetize on that and sometimes that warrants a higher APR.”


  • Big Lots credit card: 29.99%
  • Zales Jewelers credit card: 29.24%
  • Staples credit card: 28.24%

(33 cards have purchase APRs higher than 25%)


  • Dillard’s, 10.24%*
  • Military Star, 10.49%
  • Nordstrom Visa Signature, 11.15%**

* Based on creditworthiness, can be as high as 25.24%
** Based on creditworthiness, can be as high as 23.15%, and only available for purchases made at Nordstrom


One-store-only cards that can only be used within a specific store or chain of stores tend to be easier to get by people with weak or young credit histories. For many people, store cards are often their first cards, Montez said.

To access the slightly lower rates offered by many of the use-anywhere store card options, applicants must have more-established credit. The current average rate for general-purpose store cards is 21.33 percent.

Fed activity may push rates higher
When compared to 2015 survey data, 55 cards in the CreditCards.com survey advertise higher interest rates. Most of these (47 of 55) show a variable rate increase of 0.25 percent, matching the Federal Reserve’s interest rate hike in December 2015.

When the Federal Reserve begins raising its benchmark interest rates again, which may be as soon as November 2016, store cards — and all variable rate-based credit — will become costlier if you carry a balance. If retail card issuers continue to pass along the Fed’s rate increases, store card APRs such as Big Lots (29.99 percent) will be nudged higher than 30 percent.

That would make store cards’ regular APRs as high as penalty rates charged by other cards to their delinquent cardholders. Among the few store cards that charge penalty rates, the average is 27.72 percent and the highest is 30.24 percent, as advertised by the Saks Fifth Avenue MasterCard.

Until Fed rate increases gain momentum, Aite Group’s Montez believes store card rates will remain at current levels. Store card issuers will have to evaluate whether to continue to follow the Fed’s lead at some point so they don’t alienate current and future cardholders with high APRs.

“Issuers have to think about someone’s ability to pay when you have that many rate increases,” Montez said. However, some retail card issuers may keep increasing rates regardless of what the Fed does.

Sign-up perks have diminished
Don’t expect a quick burst of rewards from store cards, either.

Only 13 store cards advertise low or 0-percent introductory rate offers. And, among the cards surveyed in both 2015 and 2016, 10 ditched new cardholder sign-up bonus offers. The remaining 34 store cards that advertise sign-up offers typically give new cardholders a first-purchase discount, either in dollars or a percentage markdown.

“If you can save 15 or 20 percent by opening the card, that can be a compelling reason, especially if you are making a rather large purchase,” Lee said. For example, Best Buy’s 10 percent off, first-purchase deal would knock $100 off a $1,000 television purchase. Among the sign-up bonuses offered by the surveyed retail cards, 17 are calculated as a percentage.

The repayment burden of high store card rates

But for the most part, when compared to the offerings of more traditional reward cards, store card sign-up offers are weak. For example, the Chase Freedom Unlimited card gives cardholders $150 back after spending $500 on purchases in three months (a 30 percent return) and no interest on purchases and balance transfers for 15 months.

Who store cards work best for
Consumers who are particularly loyal to one retailer may be able to use a store card to build credit while taking advantage of store discounts and other money-saving opportunities on transactions they’d already be making.

Meijer’s credit card program rewards consumers with gas discounts and $10 back for every $750 spent in stores, and access to additional cardholder-exclusive saving events throughout the year. According to Meijer, the program is aimed at regular customers who benefit from one-stop shopping.

“Families like our environment because they can get everything in one shopping trip from groceries to gas, in most locations,” said Meijer spokeswoman Jennifer Hook. “The Meijer credit card program is designed to give families multiple ways to save as they shop.”

Other store card programs are better designed for consumers making a large purchase. Signet Jewelers, the retailer tied to four of the jeweler-branded cards in the CreditCards.com survey, doesn’t have a standing rewards program, but its cards offer deferred interest plans for jewelry purchases. This is intentional, according to David Bouffard, vice president of corporate affairs for Signet Jewelers.

“For jewelry, credit is an enabler of sales for customers,” he explained. “It allows them to use a different credit option as opposed to a bank card option, which could tie up the rest of their funds with the item they are hoping to buy. About 75 percent of the Kay and Jared card sales are bridal, so for a young guy getting engaged, credit gives him purchasing power.” While bank-set interest rates are high, limited-time financing offers give customers a break if they pay their purchase off before the 12-, 18- or 36-month financing deal ends, Bouffard added.

We’ve got all these ideas about opening these cards, but are we really taking advantage of them?

\u2014 Karen Lee
Author, certified financial planner

Ten retail-branded cards in the CreditCards.com survey give cardholders access to special financing deals for large purchases, such as the Lowe’s consumer credit card and both Amazon.com-branded cards.

Retailers use card programs to retain loyal consumers. Eighteen cards surveyed by CreditCards.com have spending tiers that boost rewards to those who keep spending.

“There may also be an appeal for some people who shop regularly at a certain store and the card makes them feel a little extra special,” Lee said. “It sounds kind of silly, but people really like that \u2018VIP treatment’ stuff.”

Survey methodology
The 2016 Retail Credit Card survey was conducted in September and October 2016 by CreditCards.com using the retail credit card terms and condition agreements of 68 cards from 44 different retailers. The retailers were selected based on the 2016 National Retail Federation chart of Top 100 retailers based on 2015 sales. All retailers from that database that offer a retail credit card program were selected for study. Collected data points included APR, rewards program details, introductory offers, co-branded partnerships, number of cards included in programs and their names.

The 2016 average APR was determined using the APR data listed in each card’s terms and conditions document. APRs noted as ranges to be issued based on applicant’s credit were averaged and then the averages of those ranges were used in a standard average formula comprised of 66 numbers (less two debit cards).

2016 Retail card survey infographic

See related: CreditCards.com’s 2016 retail credit card survey data

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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