Retail Credit Card APR is not a term many card holders are familiar with. Frequent buyers in many retail shops do not even know much about their retail credit card APR. It is very pertinent for all cardholders or intending credit card applicants to know their retail credit card interest rates. This article will help you learn many things about retail credit card APR.
Retail Credit Card APR ; Average Retail Credit Cards APR
According to a new report fount, the retail credit cards’ average APR is 25.64%. This is almost 5% more than the average overall credit card APR of 20.82%, making those store credit cards quite expensive.
Also half of Americans who participated in this survey opted for these retail credit cards on impulse. Many retail credit cards give “special financing,” which is billed as no-interest financing for a particular time. But if the balance isn’t paid off within that time limit, you’ll be charged retroactive interest on the purchase price. That’s very expensive.
Retail Credit Card APR ; Retail Credit Cards, Ideal ?
You can completely avoid retail credit cards. However, if you are a frequent shopper in a particular shop, you may only charge small amounts, and pay the balance in full each month. This will make you not to pay high interest rates. These cards can help you build credit.
However, retail credit cards normally have a lower credit limit when compared to other cards. From all indications, retail cards are not very ideal. The best options to look out for in a card are; low-APR and no annual fee credit cards. Other cards such as rewards credit cards, cash-back credit cards, or travel rewards credit cards are more ideal. They all offer similar benefits to retail store credit cards but less risky.
Use your credit card judiciously, do not overspend. Ensure to pay all your monthly dues when necessary.
Credit Card Use
Moreover, a wise use of your card can enable you build or rebuild credit, have a credit history and rewards like car rentals or hotel stays.
On the other hand, unwise use of credit can accumulate debts. The Federal Reserve Survey of Consumer Finances reports that the number of families with balances on their credit cards rose from 2013-2016, (the most recent data available) from 38.1% to 43.9%. It also discovered that credit card debt is the most common debt held by American families. Surprisingly, debt among American families is now more than the April 2008 report.
Before Getting a Retail Credit Card, carefully do the followings;
- Consider special financing, promotional interest rates and all the fees.
- Review if you’ll pay retroactive interest when you don’t pay off the entire balance within the promotional time period.
- Consider if you buy on impulse, can you avoid buying what you do not need? You can avoid overspending, imbibe discipline.
- You can pay one bill a month through direct debit. Then, set up a automatic transfer from your checking account to your credit card bill a few days later. This is a very ideal way of building credit.
- Do not sign up for a retail credit card if you already have credit card debt. Instead, work on a debt payoff plan first. You may also consider transferring your balance to a zero or low-APR card.
- Only sign up for a retail card if it’s at a store you shop at often. And don’t be tempted by a last-minute offer to open a card and save 15% on your purchase. In most cases, the 25% interest rate on the card will cost you far more than that 15% in savings.
- Consider a rewards or cash-back credit card instead of a retail credit card.
- Consider other reward cards as options, you may find a better one.