YOUR MONEY-U.S. store credit card bait hard to resist but costly for consumers

Thu Oct 22, 2015 9:00am EDT
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By Mitch Lipka

Oct 22 (Reuters) - U.S. retailers dangle enticing bait to sign up for store-branded credit cards but biting could be a costly decision for consumers, particularly for pricey items like engagement rings, computers or dining room sets that may take months, or even years, to pay off.

A recent analysis of 64 cards from 42 retailers by ( found that the average interest rate for a store-branded card is more than 23 percent. Jewelry chain Zales topped the list with a rate of 28.99 percent, followed by office supply store Staples at 27.99 percent. The average credit card has an interest rate of 15 percent.

Reuters asked Matt Schulz,'s senior industry analyst, about the pitfalls and pluses for store-branded cards.

Q: How do stores like Zales and Staples get takers for their cards? What tactics do they and other retailers use to entice consumers to apply?

A: Most retailers rely primarily on discounts at the checkout counter to entice people to apply for these cards, but it is important that people don't allow themselves to feel pressured.

If you're interested in the card, say no, but take a brochure home with you and read up on the details. If the card still sounds good to you after you read up on it, apply the next time you go to that store. Chances are all the same perks that drew you in will still be there, but most important, you'll be making a much more informed decision.