U.S. Retailers Raise Store Card Interest Rates

Over 50 major U.S. retailers, including Macy's, Gap, and Big Lots, have raised their store credit card interest rates to unprecedented levels, with Big Lots leading the hike to 35.99%, the highest recorded. These increases come ahead of the Federal Reserve's rate cuts, as retailers seek to bolster profit margins amidst sluggish sales. The average APR for retail credit cards now exceeds 30%, significantly outpacing traditional credit card rates, which hover around 20%. Analysts attribute these hikes to both economic pressures and profit motives, as store cards, despite being less popular, remain lucrative for retailers. This trend has sparked concern among consumers, particularly as household debt rises to levels unseen since 2011. The timing of these increases has drawn criticism from advocates who view them as burdensome for consumers during the holiday shopping season.