Consumers who shop with an in-store credit card are getting squeezed even more, according to new data that shows a spike in annual percentage rates for those who carry a balance.
Interest rates are continuing to climb just as the holiday shopping season is approaching, making it more costly for shoppers who plan to charge using store cards. The average retail credit card annual percentage rate hit a new record high of 28.93% this year, up from 26.72% in 2022 and 24.35% in 2021, according to Bankrate’s annual Retail Cards Study out Monday.
According to Rossman, another useful instance could be to get a sizable discount on your first purchase. "That’s a common sign-up bonus among store cards," he says. "I have a coworker who saved 10% off new appliances by following that approach." Experts caution you to think about your decision to open a store card, and only do so if you plan to pay off the balance in full and on time.
As the Federal Reserve raises interest rates to combat inflation the combo has amounted to higher borrowing costs for many Americans. The yield on the benchmark 10-year Treasury is nearing 5%, meaning costs for things such as mortgages are rising. Rossman explains that people tend to get into credit card debt for very practical reasons – either an emergency expense, some sort of unexpected medical bill, home repair or car repair, or simply day-to-day expenses outpacing their paychecks.
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