CHARLOTTE, N.C., Oct. 17, 2019 /PRNewswire/ -- With the average
APR now over 25%, store credit card APRs have risen further in the
past year, according to a new report from CompareCards.com. But
consumer demand for these cards is growing, too, even though about
half of retail cardholders have regretted getting one in the
past.
Key findings:
- The average APR for a store credit card is 25.41%, up
from 24.97% last year.
- Nearly 1 in 3 Americans said they're likely to apply for a
store credit card this holiday shopping season, up from 24% who
said so last year.
- 8 in 10 Americans either currently have a store credit
card or have had one in the past, and 46% of those who have
had one have regretted it.
- 43% of millennials with a store card say they use it as
their primary credit card. Overall, 31% said the same.
- 15% of those with a retail card didn't realize they were
signing up for a credit card. That number jumps to 22% when
looking at respondents with a household income under $25,000.
APRs are sky-high and still climbing
It's not just
that store card APRs are higher than other credit cards – it's how
much higher.
- Average APR range for a store credit card: 23.89% to
26.93%
- Average APR range for all credit cards: 17.18% to 24%
- Overall average APR for a store card: 25.41%
- Average APR for all credit cards: 20.59%
At 25.41%, the average store card APR is up a half of a
percentage point from 24.97% in 2018. It may end up decreasing
slightly before the end of the year, as some issuers incorporate
the Fed's latest rate cut into their cards. However, that's the
only reason we'd expect store card APRs to fall. The high rates for
these cards seem to be here to stay.
8 in 10 Americans either currently have a store credit card
or have had one in the past, and 46% of those who have had one have
regretted it
About eight in 10 Americans have a store
credit card or had one in the past – and if you have one, you're
likely to have more than one. Of those with a retail card, nearly
two-thirds (64%) have two or more, including 36% who have three or
more. Millennials are the most likely age group to currently have
at least one store card (65% said so, compared with 56% of Gen X
and 53% of baby boomers).
Nearly half (46%) of those who have had a retail credit card
have regretted getting one, and more than a quarter of those with
regrets have had them on more than one occasion. Millennials are
the most likely to have had regrets, with 57% of that age group
saying so, compared with 50% of Gen Xers and just 31% of
boomers.
43% of millennials with a store card say they use it as their
primary credit card
Nearly half of millennials even say the
store card is their primary card, while just 31% of all cardholders
agreed. That makes sense because many younger millennials are just
getting started with credit cards, and store cards are often a
credit newbie's first card.
Nearly 1 in 3 Americans said they're likely to apply for a
store credit card this holiday shopping season
Nearly 1 in 3
Americans said they're likely to apply for a new store card this
holiday season – up from just 24% last year, with parents of young
kids leading the pack.)
15% of those with a retail card didn't realize they were
signing up for a credit card
For many people, getting a
store card is a spontaneous decision. They were just offered a deal
– most likely with some sort of discount off the purchase – and
they went for it. However, 15% of those with a store card say they
didn't realize they were signing up for a credit card when they
applied.
Other highlights:
- Half of parents with kids under 18 carry debt on a retail card,
compared to 37% of people overall. They are also more likely than
other groups to use a store card as a primary card, have regrets
about applying for a store card and say they're likely to apply for
a card this holiday season.
- Nearly 90% of cards that offer "special financing" deals charge
deferred interest if you don't pay your balance off within the
specified time frame.
- 43% have taken advantage of "special financing" deals from a
store credit card. Another 22% would consider doing so in the
future but haven't yet.
"A store card might be enticing with their discounts and perks,
but the higher-than-average APRs can easily outweigh even the best
retail discounts," said Matt Schulz,
Chief Industry Analyst at CompareCards. "If you're not one to
routinely pay off your card balance in full each month, then you
should turn down any store card offer. With a 25% APR, the
financial risk of overpaying for your purchases are too high."
To view the full report and for more information, visit
https://www.comparecards.com/blog/2019-store-card-demand-perception/.
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
http://www.comparecards.com.
MEDIA CONTACT:
press@comparecards.com
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SOURCE CompareCards