Retail credit card APRs average 23 percent

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credit card apr

credit card apr“Would you like to save 15 percent today by opening a credit card?”

This is a refrain you’ve probably heard if you’ve ever been shopping. Many retailers like to boost their revenues with the help of branded credit cards. It’s tempting, since you can get a discount immediately.

However, the reality is that you might not be getting such a great deal, especially if you carry a balance. According to CNN Money, the average interest rate for retail credit cards is 23.23 percent. That’s a pretty hefty interest rate, and if you carry a balance you will quickly outweigh the savings you received.

No perks and a high rate

Not only can carrying a balance mean paying even more for your purchase, but these cards aren’t even redeemed by perks in many cases. Many retail credit cards do not offer rewards perks, like cash back. While some retail credit cards offer special discounts for consumers at certain times, or may offer coupons, it’s not really the same thing as a rewards program.

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In some cases, a retail card from a home improvement store can make sense. If you are getting a special financing deal on a large purchase, it can be worth it. However, you need to make sure the card is paid off before the intro period ends, or you could end up paying all the interest deferred for the special deal

Having that high interest rate for a one-time discount on your purchase can be devastating to your finances if you aren’t careful. While it’s true that you can use the credit card, get your discount, and then pay it off without paying interest, it’s important to make sure that you never miss a payment going forward.

The truth is that you are probably better off with a “regular” credit card that offers you cash back on a regular basis, rather than getting a card for a one-time discount. Carefully consider your options, and decide what makes sense for you. Chances are, it’s not a retail credit card.

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Miranda is a freelance writer and professional blogger specializing in financial topics. Her work has appeared in numerous media, online and offline. Her blog is Planting Money Seeds.