A Bankrate survey found the average retail credit card annual percentage rate has hit 28.93% this year, which is up from 26.72% in 2022 and 24.35% the year before. Those numbers are far above the average for all credit cards and can be seen as a warning for shoppers heading into the holiday shopping season.Retail credit cards differ from regular rewards cards like those issued by American Express or Bank of America and are issued by individual stores or retailers, such as Macy's.
“We used to see 30% as the high end for retail credit card APRs. In fact, 29.99% was an artificial barrier that few dared to cross — for psychological reasons, mostly,” said Ted Rossman, senior industry analyst at Bankrate. “But the market has blown past that threshold given the Fed’s aggressive series of interest rate hikes over the past year-and-a-half."
While the average APR on a retail credit card is pushing toward 30%, the average for all credit cards is well below that level at 20.72%, although that is still high. Even though rates on non-retail credit cards are well below retail credit cards, they are still notching historic highs. They are now the highest they have ever been in Bankrate’s database, which goes all the way back to September 1985. Higher interest rates on credit cards make taking on and paying back debt more challenging for consumers.
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