Costly Cards

Why retail credit cards are almost always a bad idea

No matter how long your holiday shopping list is this year, we suggest you avoid one thing: A retail credit card. The deals will be tempting and you might be struggling with your budget — plus, there’s often that enticing offer of a discount at checkout — but do your best to avoid the siren song.

According to a recent study from, people are not heeding this advice. Marketwatch reports that about one third of consumers said that they are “considering” opening a retail credit card this year, up 24 percent since last year. That’s because retailers make their credit cards almost irresistible. They often have a low credit-score requirement and come with a discount on items purchased that day.

Yet the same report found that of those who previously opened a retail credit card, 50 percent regretted it. Once the shine of the sign-up deal fades, you find yourself holding a credit card with sky high interest rates. The average APR on retail cards is now 26.01 percent. Meanwhile, the average APR for all other credit cards is just 17.21 percent.

Consider the difference in interest before signing up for a retail credit card. That high APR will make payments extremely difficult. Instead of signing up for a credit card seemingly designed to get you to fail, whittle down your shopping list and only buy the things you can safely afford.

Chris O'Shea

Chris O'Shea