Gephardt Busts Inflation: Why you should think twice about signing up for store credit cards

Estimated read time: 2-3 minutes

SALT LAKE CITY — It sounds like a great deal — save 15%, 20%, even 30% on your purchases by signing up for a store’s credit card. As tempting as it sounds, you may want to think twice.

“A lot of us are going to hear that pitch this year,” Ted Rossman, senior industry analyst for the, said. “I would be very cautious.”

We asked Rossman to break down the pros and cons of going with a store-branded credit card. Let’s start with really, the only pro. Yes, they can save you money on the spot and maybe on future purchases at their store.

“If it’s a store that you love and you shop there all the time, and you’re paying in full and avoiding interest, yeah, then maybe it does make sense to get their card,” he said.

But there are potential downsides — the biggest being high-interest rates. We dug into the terms and conditions for a few cards from popular retail chains. Keep in mind, the average credit card interest rate right now sits at 19.04%.

If you want a card from Old Navy and The Gap, expect an interest rate of 28.99%. Macy’s credit card will slap you with an interest rate of 29.74%. Meanwhile, the card offered by Dick’s Sporting Goods carries a 29.99% APR.

And be especially cautious of stores that offer credit cards with promises like, “No Interest for 12 Months!” Usually, that means deferred interest. In other words, you have 12 months to pay the card off, but if you get to 12 months and just one day, not only does the interest kick in, but it also charges you retroactively for all the interest that would have accumulated for the whole year.

“It’s a nasty tactic that a lot of store cards do,” Rossman said.

Here’s another negative: Applying for a store credit card will hit your credit with a hard inquiry that drops it temporarily. If you are applying for several cards at the same time, that is going to add up to a significant drop in your credit score. So, you might want to sign up for just one card instead of a whole bunch.


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Matt Gephardt

Matt Gephardt has worked in television news for more than 20 years, and as a reporter since 2010. He is now a consumer investigative reporter for KSL TV. You can find Matt on Twitter at @KSLmatt or email him at

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2022-11-15 19:34:36

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