Shoppers Beware: Retail Credit Card APRs Average 23%

Open WalletBefore you take the bait from the cashier and sign up for a new store credit card, be sure to read the fine print first.

Retail credit cards boast average annual percentage rates of 23.23%, according to a CreditCards.com analysis of cards from 36 of the nation’s biggest retailers.

That’s more than eight percentage points higher than the average credit card APR of 15.03%.

“Retailers dangle incentives like 15% off a purchase to encourage consumers to sign up for their credit cards,” said Matt Schulz, senior industry analyst at CreditCards.com. “But the much higher interest rates far outweigh the one-time discount for anyone who carries a balance.”

If you’re confident you will never miss a payment and you think the retailer’s rewards program would provide you with savings, then it could be a fine deal. But if there’s even a small chance you’ll carry a balance, you could end up paying big money in interest as a result.

Customers with a 23.23% APR credit card, for example, would be hit with $840 in interest if they carry a $1,000 balance and only make minimum monthly payments — and it would take them 73 months to repay that balance. That compares to $396 in interest for the average credit card.

Jeweler Zales’ store card topped the list, with a rate of up to 28.99%, Office Depot and Staples both offer cards with rates as high as 27.99%, and Best Buy credit cards come with rates ranging between 25.24% and 27.99% depending on your credit.

Need to transfer a high rate credit card balance without any balance transfer fees, to a lower rate card? This is possible at First Financial, where our credit card rates are as low as 10.9% APR and we have no balance transfer fees!* And for a limited time – if you are approved for a balance transfer of $5,000 or more to our VISA Platinum Credit Card, you will receive 10,000 bonus CURewards Points! You can apply for the balance transfer by stopping into any branch or calling 866.750.0100 to be sent a balance transfer request form.**

If you have a great deal of debt, we also have a free, anonymous online debt management tool called Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live.

*APR varies from 10.90% to 17.90% when you open your account based on your credit worthiness. This APR is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. No Annual Fee. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Platinum Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

**Additional bonus points will be reflected within 30 days from the balance transfer approval and can be viewed when signed into your VISA Platinum Card Account online through Online Banking. In order to redeem bonus points, an offer reference must be made to a First Financial representative. Bonus points can only be redeemed one time per member, on an approved balance transfer of $5,000 or greater during the promotional period of 4/28/14 – 12/31/14.

Article Source: Blake Ellis for CNN Money, http://money.cnn.com/2014/08/07/pf/retail-credit-cards/index.html?iid=SF_PF_River

 

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