Store credit cards now carry a record interest rate as more Americans struggle to make payments

Retail credit card interest rates have reached an all-time record, according to new data from Bankrate.

The average APR for retail credit cards is 30.45% this year, which is up from 28.93% a year ago, 26.72% two years ago, and 24.35% three years ago, research shows.

For a person who normally carries about a $1,000 balance on their credit cards, they would now spend $304.50 a year on interest fees. In 2021, that amount would have been $243.50.

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Bankrate's study found that several retailers, including Academy Sports + Outdoors Credit Card, Petco, Burlington, Piercing Pagoda, Good Sam, Big Lots and the Michaels Credit Card, had an APR of 35.99%.

Retail credit cards generally have a much higher APR than the national average for all credit cards. Bankrate says the average APR for all credit cards is 20.78%.

"Thirty percent used to represent an unofficial ceiling for retail credit card rates, but now most retail cards have crossed that threshold,” said Bankrate senior industry analyst Ted Rossman. “The best way to use any credit card is to pay in full each month so that you avoid interest. That's especially true for retail cards.”

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Bankrate also warned of deferred interest promotions, when retail credit cards offer 0% interest for 12 months. Bankrate says customers generally have to pay the entire balance of the credit card by the end of the 12 months, otherwise would be charged retroactive interest going all the way to the start of the promotion.

“Don't fall into a trap and apply for one of these cards impulsively at the checkout counter,” notes Rossman, “It's fine to say 'no' or 'not right now' or 'I'm going to think about it.' The retailer may dangle 10% off today's purchase if you sign up, but that's not worth it if you're going to pay a 30% interest rate for years to come. Be absolutely sure that you can pay in full before interest hits."

The record comes as credit card delinquencies have increased over the years. According to federal data, 10.9% of outstanding credit card debt was delinquent in the second quarter of 2024, marking the highest delinquency rate in the U.S. since 2013.

Also, data released by TransUnion last month indicates that the average credit card borrower now carries a balance over $6,000.