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Poll: Most retail store card applications happen at checkout

A new poll reveals 62% of consumers have applied for a retail card at some point


Retail store cards are often available at checkout and typically come with a promotional offer, making them very attractive. But beware of high interest rates and inferior rewards programs.

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According to a new survey by, 68% of U.S. adults – nearly seven out of 10 people – applied for retail credit cards on an impulse at checkout. That’s down just slightly from last year’s survey, which found that 69% applied for retail cards on a whim.

Although it’s enticing to get a deal when you sign up for retail store cards, it’s essential to keep in mind that they usually come with way higher APRs than non-retail cards – the average retail card APR is 24.35%, while the average non-retail card APR is 19.92%. The average store-only card APR is 25.77% (down from 25.90%) and the average co-branded card APR is 22.12% (up from 22%). That said, because the Fed didn’t make any rate adjustments over the past year, so APRs remained largely flat.

Ted Rossman, senior industry analyst for, said retail credit cards have sometimes had a negative connotation because of high interest rates and lesser rewards programs.

But he added that several retailers have begun offering a more competitive set of rewards categories at their stores and on other spending categories.

Before applying, it’s important to carefully consider how you’ll use the card, he cautioned.

“If you pay in full and avoid interest, some retail cards can save you a lot of money, especially if you’re loyal to the store,” Rossman said.

2021 retail credit card survey key findings

  • The highest retail card APR is 29.99%, offered by Big Lots, Discount Tire, Guitar Center and five members of the Signet Jewelers family.
  • The lowest retail credit card APRs range from 10% to 15.24%, offered by these retailers: Amazon Secured Card (10%), Military Star Card (10.24%), Sears Home Improvement Account (14.40%) and Costco Anywhere Visa by Citi (15.24%).
  • The older you are and the higher your income, the more likely you are to have applied for a retail credit card – 75% of boomers, 64% of Gen Xers, 64% of millennials and 39% of Gen Zers have applied for them at some point.  A whopping 76% of higher-income households ($80,000 or more annually) have applied, compared with 74% of middle-income households (between $40,000 and $79,999) and 58% of lower-income households (less than $40,000).
  • A discount or promo offer was the No. 1 reason (55%) people cited for applying for a retail card, followed by ongoing rewards (36%), the ability to pay over time (30%), to help increase their credit scores or histories (26%) and brand loyalty (18%).
  • Discounts or promo offers were the No. 1 reason cited for applying for retail cards by boomers (62%), Gen Xers (63%), millennials (45%) and Gen Zers (36%). Those older than 40 also chose discounts or promotions as their No. 1 reason far more than younger adults.
  • Gen Zers and millennials were most likely to say they felt pressured to apply for a retail card from an employee (27% and 15%, respectively).

Impulsive card applications aren’t a great idea

Howard Dvorkin, CPA and chairman of, said he was disappointed that seven in 10 people “applied impulsively at checkout.” Whether it’s a new car or a new shirt, impulse purchases are likely to go wrong more often than they go right.

Retail credit cards are like water filters, Dvorkin said. You need to throw them out every month. Most retail cards lure you in with deep discounts for your first purchase – but then hit you with high interest rates immediately afterward.

“I’m mildly surprised about that interest rate just shy of 30%, but I’m certainly not shocked,” Dvorkin said. “Retail cards are the payday loans of plastic.”

On the flip side, Dvorkin was encouraged that the upfront discounts and promotional offers enticed boomers, Gen Xers and millennials. “If they can keep track of their cards and cancel them right after they wring every last dollar of value, then they can save a lot of money for very little effort,” he said.

Why retail store card APRs differ so much

Nate Tsang, founder of WallStreetZen, wasn’t surprised at all about the high APRs, particularly at jewelry stores. He said the entire industry has primed people to put personal finance aside when they’re in the store. “A high APR is basically the credit card version of ‘three month’s salary for a ring,’” Tsang said.

Low APRs from Apple, Amazon, Kroger and Sears speak to the high-volume approach these companies are aiming for, Tsang said. They are businesses that anyone with money can shop at and they’re financially stable enough – “except Sears” – to try and make more off-brand loyalty than interest payments.

Moreover, he noted, 10% interest on general purchases like groceries (Kroger), tech (Apple) and nearly everything (Amazon) makes sense in comparison to higher interest on specialty products, like Guitar Center’s musical instruments or Big Lots’ discount furniture.

In the middle, you have companies selling a narrower array of groceries and everyday products like Walgreens and upscale-yet-ordinary items like Williams Sonoma.

Walgreens recently introduced two new credit cards that give 5% to 10% cash back on in-store purchases and 3% cash back on a wide variety of health and wellness purchases. And Williams Sonoma, Pottery Barn, West Elm and Mark & Graham (which share the same parent company) consolidated into one brand called Key Rewards. For cardholders with balances the APRs went up but the rewards got an overhaul and now offer 5% cash back at those brands and 4% cash back at grocery stores and most restaurants except for fast food establishments.

These companies are “trying to break through the noise with high cash back rewards,” Tsang said. No doubt, 5% cash back is notable, and if you can actually get 10% cash back on your purchases at Walgreens, that’s substantial.

“I do wonder where the arms race will end and how long Walgreens can sustain that 10% amount – it really feels like an upper limit,” Tsang said.

Why the younger crowd might feel pressured to open a retail card

Tsang said he also wasn’t surprised Gen Zers and millennials were the most likely to report feeling pressure from the store or an employee to open a retail card.

This is a common phenomenon in personal finance, and specifically with regard to credit cards, he said. Younger adults have less experience with credit and are therefore more likely to feel pressured when discussing an opportunity.

Why there are so many retail credit cards out there

The cash back rewards phenomenon largely goes back to the 2008 financial crisis, according to Tsang. Banks were making far less money off of home mortgages, which to that point had made up a core of their business. Offering personal credit became a revenue replacement, with cash back the enticement to get people to sign up.

“Retail moved in soon after, and we’re now smack in the middle of the frenzy,” Tsang said. The expected raising of interest rates in 2022 will likely have some effect on the number of retail cards available, but it’s difficult to tell what the upshot will be. Brands have gotten a taste of what banks had more than a decade ago – and it’s just too lucrative to not offer these types of cards.”

Bottom line

Before you fill out that retail card app at checkout, think about the ramifications. Consider the following before you sign on the dotted line:

  • If you already have a number of cards in your wallet, ask yourself if you really need one more that will come with a higher APR.
  • Don’t charge more than you’re able to pay off at the end of the month.
  • Watch out for deferred interest (interest accrues but the issuer waives it during the promotional period) because if you don’t pay off your balance in full before the promo ends you’ll end up having to pay all of the interest that accrued from the original charge date.

Survey methodology conducted the interest rate research Sept. 24, 2021, using publicly available terms and conditions disclosures. Each of the 100 largest retailers (as defined by the National Retail Federation based upon 2019 sales) that offers a retail credit card program was selected for the study. This included 93 cards from 67 retailers (58 store-only and 35 co-branded cards).

Additionally, commissioned YouGov Plc to conduct a consumer survey. Total sample size was 2,226 U.S. adults, including 1,463 who have applied for a retail credit card. Fieldwork was undertaken online from Sept. 15-17, 2021.

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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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