Consumers are finally saying no to costly retail credit cards

[MarkintheHV]

https://creditnews.com/economy/consumers-are-finally-saying-no-to-costly-retail-credit-cards/

I guess the rest of the public is starting to figure out what we have known all along.

Some highlights:

• Retail credit cards charge more than 30% interest on purchases, much higher than the 21% average for general-purpose cards. 
• The pandemic also accelerated the shift from in-store to online shopping, reducing signups at the check-out counter. Stores like Target and Neiman Marcus have complained about this.

• store credit cards initially appealed to subprime shoppers because they provided easy access to credit.
• subprime borrowers are already falling behind on credit payments due to high interest rates and rising costs.

[Anonymalous]

I don't think most people check the interest rate before they apply, so I doubt that's a factor. But the reduction in opportunities to push cards at the counter probably has a big effect, because it's an impulse buy targeted at a moment of weakness.

It's not mentioned at all, but I wonder if the finfluencers have had any effect, because they relentlessly promote bank cards while disparaging retail cards.

[flexin222]

Great post! My Black Friday spending was paying down debt which is a gift that keeps on giving. I recently signed up for Venmo for paying laborers and they approved me for a Venmo card. Upon checking and seeing their apr which If I remember correctly was 29 percent...I leaned back, inhaled and clicked right off it. I also, refuse to get retail cards. Just waited till my birthday in October and asked for credit increases which was no problem since I don't spend much. Been gardening for what seems like years and I really gotta update my profile...I'm such a lazy retiree..lol

[Horseshoez]

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@flexin222 wrote:

Great post! My Black Friday spending was paying down debt which is a gift that keeps on giving. I recently signed up for Venmo for paying laborers and they approved me for a Venmo card. Upon checking and seeing their apr which If I remember correctly was 29 percent...I leaned back, inhaled and clicked right off it. I also, refuse to get retail cards. Just waited till my birthday in October and asked for credit increases which was no problem since I don't spend much. Been gardening for what seems like years and I really gotta update my profile...I'm such a lazy retiree..lol

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I'm curious why folks are thinking an APR of 29% is high these days almost constant interest rate hikes by the FED; with the exception of my one PenFed credit card, all of my bank cards have APRs which range from 27% to 31%.  Personally I could care less, I don't carry balances and don't pay any interest, so the APR could be north of 50% and it still wouldn't impact me.

[CreditCuriosity]

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@Horseshoez wrote:

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@flexin222 wrote:

Great post! My Black Friday spending was paying down debt which is a gift that keeps on giving. I recently signed up for Venmo for paying laborers and they approved me for a Venmo card. Upon checking and seeing their apr which If I remember correctly was 29 percent...I leaned back, inhaled and clicked right off it. I also, refuse to get retail cards. Just waited till my birthday in October and asked for credit increases which was no problem since I don't spend much. Been gardening for what seems like years and I really gotta update my profile...I'm such a lazy retiree..lol

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I'm curious why folks are thinking an APR of 29% is high these days almost constant interest rate hikes by the FED; with the exception of my one PenFed credit card, all of my bank cards have APRs which range from 27% to 31%.  Personally I could care less, I don't carry balances and don't pay any interest, so the APR could be north of 50% and it still wouldn't impact me.

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Might not impact you, but say you did have a balance and financial situation were to change would you rather pay 15-20% interest or 30% interest as a consumer?  As quite the difference.  I have over 30 cc's and most of them are in the 17-21% range some are sub 10% such as the gold standard AOD 3% cash back card 7.49 fixed apr and other sub 10% cards as well and as mentioned some in the 17-21 range and I do have a best buy visa I think at 30.49% as well.  I know which one if I was to get in a crunch in I would be charging to personally.  If I could predict everything in life I would of been already retired

[Horseshoez]

The difference between us is I refuse to maintain more than a few cards, so they're easy to manage, and on the off chance I screw up, a few dollars in interest isn't going to hurt.

[LADave]

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@MarkintheHV wrote:

https://creditnews.com/economy/consumers-are-finally-saying-no-to-costly-retail-credit-cards/

I guess the rest of the public is starting to figure out what we have known all along.

Some highlights:

• Retail credit cards charge more than 30% interest on purchases, much higher than the 21% average for general-purpose cards. 
• The pandemic also accelerated the shift from in-store to online shopping, reducing signups at the check-out counter. Stores like Target and Neiman Marcus have complained about this.

• store credit cards initially appealed to subprime shoppers because they provided easy access to credit.
• subprime borrowers are already falling behind on credit payments due to high interest rates and rising costs.

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It's about time. With so many credit options these days, having easy access to credit at a particular store just isn't enough. I won't sign up for any card unless it means more money in my pocket somehow, either through 0% financing or enhanced rewards or a combination of both. Of course, I realize that I'm also an outlier.

[markbeiser]

Fortunately I'm in a position to not care about the APR on cards, even a little bit.
I pay my balances in full before the statements cut. So if I need a few weeks to pay something, I can let it go to the statement date and pay it on the due date.
If I need longer than that, I can pay off CCs with my HELOC that is at prime+0%.

I've gotten in trouble with a store card years ago, never again!

[flexin222]

Hey Horseshoez, Creditcuriosity is right and I'm carrying debt on cards. Imagine being on a fixed income and needing appliances after a home purchase. Then, transferring high apr balances to the lower cards to lessen the money these card companies can make off you in interest. You still have to pay transfer fees and that balance, which could take a year or 2. It sucks, but what kills me the most is that even with investments you can't just take out money to pay off balances and crypto is being taxed like we're rich. Those high APR's you're talking about is a Discover card and with my present scores around 750's, I shouldn't be punished for it. I wonder what's the lowest APR our members have on Discover?

[CreditCuriosity]

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@flexin222 wrote:

Hey Horseshoez, Creditcuriosity is right and I'm carrying debt on cards. Imagine being on a fixed income and needing appliances after a home purchase. Then, transferring high apr balances to the lower cards to lessen the money these card companies can make off you in interest. You still have to pay transfer fees and that balance, which could take a year or 2. It sucks, but what kills me the most is that even with investments you can't just take out money to pay off balances and crypto is being taxed like we're rich. Those high APR's you're talking about is a Discover card and with my present scores around 750's, I shouldn't be punished for it. I wonder what's the lowest APR our members have on Discover?

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think 16.24 at the moment on discover purchase APR and that is below published APR of 17.24..   Some might have lower than me if it is a really old account.