Store-only credit card rates average 27%

SAN ANTONIO – Store-only credit cards may have their perks, but they can also have a high price — as high as a 30% APR.

The average APR for store-only credit cards is up to 27.52%, despite a cut in the prime rate, according to a new report from CreditCards.com. By comparison, the average overall credit card APR is 21.1%.

As we head into holiday card-swiping season, shoppers can expect to hear a familiar and enticing pitch: "Do you want to sign up for a store credit card?"

"Right away they tell you, ‘Oh, sign up. We'll take $45 off your purchase, blah, blah, this and that,'"  shopper Sofia Hernandez said. "I refuse to get the store credit cards because a lot of them have a high interest rate."

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The top reasons people get a retail card, according to the study, are because the card was easy to get, the clerk pressured them, they love the store and, primarily, because of the discount they get at sign-up.

"That's great if you pay the balance off, but most people can't," financial adviser Kent Copeland said. "So, if it takes you the year to pay off Christmas, you saved 10 percent, but you pay 30 percent interest."

The study reviewed 88 cards from 64 retailers and found the highest was Brandsource with 30.24% APR.  Store cards with a 29.99% APR include Big Lots, Discount Tire, Piercing Pagoda, Zales, Jared, Kay and Sterling Family of Jewelers.

"One of the things retail cards are very good for is building your credit when you don't have any," Copeland said. But he cautions against applying for too many because it can ding your credit score.

"Probably the best thing you can do for yourself is not apply for a whole bunch of credit cards, but have a few and use them responsibly," he said.

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As retail cards go, he recommends one that is for a store you frequent, so you can demonstrate the ability to pay it off and improve your creditworthiness.

Some offer helpful promotions and cash back such as Target, Best Buy and Amazon.