Retail Credit Card Interest Rates Remain Sky High

While the average credit card interest rate has dropped slightly and experts muse about Fed rate cuts this fall, there’s one metric we can count on — astronomical retail card interest rates.

The 2025 Bankrate Retail Cards Study reveals the average retail card APR remains above 30 percent, which is the second-highest average rate since 2008.

“Card issuers say they charge higher interest rates on retail cards because these cards are easier to get, and delinquencies have increased in recent years,” says Ted Rossman, Bankrate senior industry analyst. “But these are really high rates, and they often apply to all customers who carry balances.”

That’s in spite of Fed rate cuts at the end of 2024, which would traditionally be followed by a drop in credit card, auto loan and home equity line of credit (HELOC) rates. But about a quarter of the cards in Bankrate’s study sample actually increased rates over the past year.

Key insights on retail card interest rates in 2025

Retail card rates are 1.5 times higher than regular credit card rates

According to Bankrate’s study of 110 sample retail cards, the average retail credit card charges 30.14 percent. While that’s down slightly from 30.45 percent in 2024, it’s still the second-highest rate calculated by Bankrate and CreditCards.com studies dating back to 2008.

Today’s average retail card interest rate is nearly 1.5 times higher than the average interest rate for all credit cards, which was measured at 20.12 percent earlier this month.

Store-only card rates run even higher than co-branded card rates

Store-only credit cards, also called closed-loop cards, can only be used at a certain store or chain of stores — and they boast the highest average APR of 31.64 percent.

That’s compared to the average 28.65 percent APR for co-branded cards, which are open-loop cards with logos for both a retailer and card network, like Visa or Mastercard. Co-branded cards can be used anywhere to earn retailer-specific rewards.

Since the release of our 2024 study, the Fed has cut interest rates by 1 percentage point. But 23 retail credit cards actually increased their APRs over the past 12 months. Here are a few of the biggest jumps:

• Saks Credit Card*: from 29.24 to 35.99 percent
• Brandsource Credit Card*: from 29.99 to 34.24 percent
• Two Gap cards: from 29.99 to 33.99 percent
• Two Victoria’s Secret cards: from 32.24 to 35.99 percent
• Two Dillard’s cards: from 30.24 to 33.24 percent
• Saks World Elite Mastercard*: from 29.24 to 32.24 percent

The Saks cards changed issuers from Capital One to Comenity, and the Dillard’s cards changed from Wells Fargo to Citi. Brandsource, Gap and Victoria’s Secret stayed with the same issuers — Citi, Barclays and Comenity, respectively.

Notably, another 66 retail cards have lowered their APRs since last year. Sixteen APRs haven’t changed, and we’ve added five new cards to the study.

Retail cards with the highest interest rates

The highest APR from our study is currently 35.99 percent, a tie among the following 13 cards. Twelve are store-only cards and one, the Victoria’s Secret Mastercard*, is a co-branded card:

• Academy Sports + Outdoors Credit Card*
• Banter Credit Card (Piercing Pagoda)*
• Burlington Credit Card*
• Good Sam Rewards Credit Card*
• Jared The Galleria of Jewelry Credit Card*
• Kay Jewelers Credit Card*
• Michaels Credit Card*
• Petco Pay Credit Card*
• Saks Credit Card*
• Sterling Family of Jewelers Credit Card*
• Victoria’s Secret Credit Card*
• Victoria’s Secret Mastercard*
• Zales Diamond Card*

Retail cards with the lowest interest rates

Here are the cards from our study with the lowest APRs:

• Amazon Secured Card*: 10 percent
• Military Star Card*: 14.49 percent on most purchases, 0 percent for eligible military clothing purchases
• Holiday Smart Savings Credit Card (Circle K)*: 16.20 percent
• Bass Pro Shops CLUB Card*: 20.62 percent
• IKEA Projekt Credit Card*: 21.99 percent
• IKEA Visa*: 21.99 percent

Are retail card rates even allowed to be this high?

In short, yes — card issuers can set interest rates as high as they want, despite a few proposed federal policies to limit rates. That’s because a 1978 Supreme Court case ruled that state interest rate caps pertain to where the bank is based, not the cardholder.

Because of that, card issuers tend to set up shop in states that have no interest rate cap or a very high cap, like South Dakota and Utah.

Of course, not all consumers are willing to apply for a card with a high rate, so issuers are somewhat motivated to appeal to potential card applicants. But even that doesn’t seem to dissuade retail card issuers.

Note that the Military Lending Act has a 36 percent APR cap for active servicemembers, their spouses and eligible dependents. This has become a de facto ceiling for all. However, before inflation and interest rates ramped up in 2021 and 2022, the unofficial ceiling for retail cards was around 30 percent.

What does the future of retail cards hold?

A decade ago, retail cards were hot — brands offered them as a way to increase profit margins, and shoppers snatched them up to get welcome discounts and in-store rewards.

But the retail credit card space has shrunk considerably in recent years. Equifax reports only 16.8 million private-label, or store-only, credit cards were originated in 2024. In 2014, that number was 43.9 million. Private-label originations peaked in 2015 at 44.3 million and have declined every year since, except for a brief increase from 2020 to 2021.

You might say that buy now, pay later killed the retail card star. Companies like Affirm, Afterpay and Klarna have captured market share with their easily accessible, interest-free payment plans.

General rewards cards have also risen in popularity. Bankrate’s 2024 Credit Card Rewards Survey shows 3 in 5 Americans (60 percent) have a rewards card. And half of cardholders (50 percent) said cash back is their favorite card feature, compared to 3 percent who said retail perks like extended warranties or purchase protection.

How to shop smart with your retail card

If you’re loyal to a certain brand or not willing to give up in-store deals, a retail card can still be a helpful addition to your wallet. Here’s how to use it responsibly.

• Pay off the card in full. Given the record-high interest rates, carrying a balance on a retail card can quickly spiral out of control. And future Fed rate cuts probably won’t change that. If you have debt on the card, make a repayment plan and pause using it for purchases until your balance is back down to zero. Any rewards you earn will be devalued by interest charges until then.
• Don’t fall for deferred interest. “Many retail cards dangle a 0 percent interest promotion for a while but frame it as deferred interest or no interest if paid in full,” Rossman says. “This means if you have any remaining balance when the clock expires, even just a single dollar, they can go back and charge you retroactively for all of the interest that would have accumulated back to the start of the term. Deferred interest promotions are much more common on retail cards than general-purpose credit cards — buyer beware.”
• Take advantage of rewards and deals. Rossman says there are two ways a retail card can work in your favor. “One is getting a solid return on purchases from retailers that you buy from frequently,” he explains. “Amazon, Target and Best Buy are among those that offer up to 5 percent cash back when you buy from them using their credit cards.” The second is when you can get a discount for a big purchase you would’ve made anyway, “such as 20 percent off a new appliance or a bunch of holiday gifts.” Just make sure you pay off the purchase in full before interest kicks in.

• Methodology
  

  Bankrate surveyed 110 retail credit cards on July 21, 2025, using publicly available terms and conditions disclosures. We included each of the 100 largest retailers, as defined by the National Retail Federation based on 2024 sales, that offer credit card programs. The sample included 55 co-branded cards and 55 store-only cards. When a card offered an APR range, we included the midpoint of the range in the overall averages.

*The information about the Saks Credit Card, Brandsource Credit Card, Saks World Elite Mastercard, Academy Sports + Outdoors Credit Card, Banter Credit Card (Piercing Pagoda), Burlington Credit Card, Good Sam Rewards Credit Card, Jared The Galleria of Jewelry Credit Card, Kay Jewelers Credit Card, Michaels Credit Card, Petco Pay Credit Card, Saks Credit Card, Sterling Family of Jewelers Credit Card, Victoria’s Secret Credit Card, Victoria’s Secret Mastercard, Zales Diamond Card, Amazon Secured Card, Military Star Card, Holiday Smart Savings Credit Card (Circle K), Bass Pro Shops CLUB Card, IKEA Projekt Credit Card and IKEA Visa has been collected independently by Bankrate. The card details have not been reviewed or approved by the issuer.