Retailers want you to sign up for and use their credit cards. They know if you have their cards in your wallet it increases the likelihood that you’ll spend more with them. So, expect to get pitched every time you check out this holiday season, both in store and online.

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“They entice you with instant savings—10 percent off your entire purchase if you apply right now—because they're betting you are not going to pay off that credit card and will pay an extremely high interest rate,” said Howard Dvorkin, chairman of “You're going to get that 10 percent discount, and they’re going to make money off the interest, so stay away from them unless you’re prepared to pay off the bill when it arrives.”

Most Americans who have store credit cards (68 percent) applied for them at checkout, according to a recent survey by A discount or promo offer was the top reason (55 percent) cited for applying.

“I tend to think that we should make this a thoughtful decision, not an impulsive one,” said Ted Rossman, an industry analyst at “Don't get suckered into signing up just because the cashier was peddling this aggressively. I wouldn't sign up for any credit card just for the one-time bonus.”

While having a store’s card may make sense for you, applying for credit can impact your credit score and overall finances, so it should never be done without careful consideration. You need to understand the terms, fees, and interest rate. Most retail credit cards have higher interest rates than traditional credit cards.

In September, surveyed the interest rates for credit cards offered by 67 U.S. retailers. Key findings:

  • The average APR for retail cards was 24.35 percent, while the average APR for non-retail cards was 19.92 percent.
  • The retail cards with the highest interest rate (29.99 percent APR) were offered by Big Lots, Discount Tire, Guitar Center, and five members of the Signet Jewelers family (Jared, Kay Jewelers, and Zales are a few brands you may recognize).
  • The Retail cards with the lowest interest rates were the Amazon Secured Card (10 percent), Military Star Card (10.24 percent), Sears Home Improvement Account (14.40 percent) and Costco Anywhere Visa by Citi (15.24 percent).

Retail Credit Cards May Make Sense for Some

If you frequently shop at a store, you may get some nice perks for having its credit card, such as special discounts, early access to sales, or rewards points.

For example, the new myWalgreens credit card offers 10 percent rewards on purchases of Walgreens-brand products and five percent rewards on all other Walgreens purchases.

The Key Rewards Credit Card from Williams Sonoma offers five percent cash back rewards at the company’s seven brands (including Pottery Barn and West Elm), plus free shipping.

Just remember, if you carry a balance—as four in 10 cardholders currently do, according to the American Bankers Association—the interest will wipe out any rewards you earn or one-time bonus you get.

Deferred Interest

Many stores offer “deferred interest” credit cards during the holiday shopping season. With deferred interest financing, you pay no interest or a reduced rate for a specific time period. If you make one late payment or owe any money—even a dollar—after the grace period ends, you’ll get hit with retroactive interest—as high as 29.99 percent—for the full amount of the purchase.

When you need to make a large purchase and your budget is stretched, this might seem like a smart way to go. And it can be, if you understand how deferring interest works. But 55 percent of those who go this route, don’t know what they signed up for, according to the 2021 deferred interest study by WalletHub.

“Deferred-interest financing is like a wolf in a sheep’s clothing, pairing an enticing offer—something like ‘no interest if paid in full’ or ‘special financing’—with a clause that allows the deal to turn ugly if you make the slightest mistake,” according to Alina Comoreanu, a senior researcher at WalletHub.

Some Other Considerations

A smart shopper might benefit from having a retail credit card, or two. But in most cases, the retailer is the real winner.

“If you have credit available, you’ll spend more at that store,” said Becky House, a  financial educator with American Financial Solutions, a non-profit credit counseling agency in Seattle. “You feel like the more you spend, the more you save, except it doesn’t work out that way, because you may spend more than you intended.”

Remember, getting a new line of credit will also have some impact on your credit scores.

“Every time you open a new credit card account, there will be a mark on your credit report,” said Bill Hardekopf at “Too many marks can adversely affect your credit score. So, it is not a good idea to apply for a number of store credit cards during the same shopping season.”

The credit limits on retail cards are typically smaller than with traditional credit cards—one reason it’s easy to get accepted for store cards—so carrying a high balance will be more damaging to your credit scores. (Credit utilization, how much do you owe on your available revolving credit, is one of the key factors that determining credit scores.)

How to Do It Right

My wife and I have couple of store credit cards. They don’t have annual fees, and we don’t pay interest, since we pay the balance off in full. We use the cards when there’s a special loyalty reward that saves us money on a purchase we were planning to make. We might take advantage of “20 percent off all sweaters,” but would probably skip “save $35 when you make a $500 purchase.”

Here are some tips from for those who want to use a store card without the pitfalls:

  • Read the terms of the card carefully before signing up. Is there an annual fee? What’s the interest rate? How does the rewards system work?
  • Use a store card like cash. Only make purchases if you can pay off the balance in full and on time, to avoid costly interest.
  • Stick to your budget. Avoid the temptation to buy more because you have a new credit card. If you give in, you could feel this financial pain well into the new year.

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Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He is also the consumer reporter for KOMO radio in Seattle. You can also find him on Facebook, Twitter, and at