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Warning: Do NOT sign up for these credit cards


Mike Timmermann,

When you head to the checkout counter this holiday season, don’t be surprised if a retail sales associate asks if you’d like to save 20% by signing up for a new credit card.

A recent survey found that store cards are coming with more rewards these days, but there’s a big catch.

Here’s why you DO NOT want to save 20%! 

RELATED: Your guide to paying off credit card debt

In its 2017 study of 65 cards from 40 retailers, reported the average retail card APR (annual percentage rate) is 24.99%, compared to the general credit card average of 16.15%.

The number is even higher for store-only cards (26.38%), according to the data.

Store-only vs. co-branded credit cards

Since one-store-only credit cards generally have very high interest rates, money expert Clark Howard doesn’t want you to sign up for one, especially if you can’t pay off your balance every month.

Some retailers offer both store-only and co-branded cards, though the store-only cards tend to charge more interest.

Co-branded cards have the retailer’s name on them, but they’re affiliated with a major card network. They’ll feature a Visa, Mastercard, American Express or Discover logo.

When you don’t see any of those logos on the card, you know it’s a store-only card.

This store credit card charges 30% interest

According to, only 10 of the 65 retail cards surveyed offer APRs less than the general average (16.15%) to their most qualified customers.

Meanwhile, the Brandsource credit card has become the first store card to crack the 30% APR threshold:

Retail cards with the highest interest rates

  • Brandsource credit card: 30.49%
  • Big Lots credit card: 29.99%
  • Piercing Pagoda credit card: 29.99%
  • Zales credit card: 29.99%

Retail cards with the lowest interest rates

  • Academy Sports + Outdoors Visa Signature: 12.24%
  • Ace Rewards Visa Signature: 14.99%
  • Kroger 1-2-3 Rewards Visa: 14.99%
  • Barclaycard Visa with Apple Rewards: 14.99%

RELATED: New tool offers credit card perks without debit card dangers

Retailers hike rewards to lure you in! 

Store associates are getting people to sign up for these cards by highlighting “new and improved” rewards.’s latest study found that more retailers are tweaking their cards to better compete with the general-purpose card that’s probably already in your wallet.

The most common rewards are cash/points back offers based on store spending and discounts on the first purchase.

Clark: Beware of ‘hideous retroactive interest’

Another thing store credit cards are known for is offering a deferred interest period. However, this isn’t the same as a typical credit card’s 0% intro APR offer.

One-store-only cards may charge retroactive interest if you don’t pay in full before the 0% financing is up.

For example, if you make a $1,000 purchase at 24.99% deferred interest for 12 months, you’d pay $249.90 in interest if you don’t pay off the entire balance during that promotional period.

It doesn’t matter how much is left over on the bill, you would owe $249.90 after the year is up!

RELATED: Clark’s #1 secret to avoid overspending this holiday season

Use general-purpose credit cards instead 

If there’s even the slightest chance that you’d carry a balance, Clark says you’re better off rejecting all store-only cards, even if the sales pitch sounds amazing!

Instead, he likes Citi Double Cash. It offers 1% cash back on purchases, then another 1% when you pay them off.

Recap of Clark’s take:

  • One-store-only credit cards are inferior to general-purpose cards
  • Always pay your balance in full every month
  • Read the fine print to avoid deferred or retroactive interest
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