Stellar Snippets
According to a Bankrate report, the average APR for retail credit cards has hit a record 28.93%, which is up from last year's 26.72%.
Previously, this higher interest rate was designated as a penalty rate but now, it's transitioning into a potential standard rate.
Retail store credit cards may offer easier approval for those with limited credit history or lower credit scores, but it's important to consider the high-rate line of credit that comes with them.
Carrying a balance on these types of cards could end up costing you more than double the amount of the original item price.
Retail cards commonly offer 0% interest promotions that may become costly if you overlook the fine print.
Many of these promotions require customers to pay off the full amount by the end of the period, or they face significant consequences.
"If they have not paid off the purchase in full by the end of the period, not only will they earn interest on the remaining balance, but they will also retroactively incur interest on the original purchase price" said credit cards expert Sara Rathner.
Still, around 74% of holiday shoppers plan to use a credit card this year, so experts advise taking your time and not making the big decision to open a new line of credit at the cash register.