Retailers Raise Store Credit Card Interest Rates to Record Highs Before Fed Cuts

Over 50 major U.S. retailers increased APRs on store-branded credit cards, with rates exceeding 35%, as consumers face mounting credit card debt.

A Bankrate survey revealed that at least 50 major U.S. retailers, including Macy's, Gap, Petco, and Big Lots, raised store credit card APRs to record highs between September 2023 and September 2024.
Store credit card interest rates now average 30.45%, with some retailers charging up to 35.99%, significantly higher than the average 21% APR for general-purpose credit cards.
Retailers increased rates ahead of the Federal Reserve's September 2024 rate cuts, aiming to protect profit margins as credit card debt and delinquencies reach levels not seen since 2011.
Experts warn consumers to carefully evaluate store card offers during the holiday shopping season, as high APRs and deferred interest promotions can lead to significant financial burdens.
Retailers rely heavily on store credit card programs for revenue, with companies like Macy's deriving nearly half of their operating profits from credit card-related income.