As the holidays approaches consumers may be tempted to spend more on their credit cards or open a new store card. The average retail credit card is now charging a whopping 28.93% interest on balances, and retail cards have surpassed the 30% threshold that retailers and banks dared not to cross. Interest rates have reached historic highs in response to rate hikes by the Federal Reserve in 2022 and 2023. Some retailers like Academy Sports, Burlington and Michales are now charging 33.34% annual interest rates. You may be surprised to know that credit cards can actually charge whatever they want so it is no surprise that retail cards have raised their interest rates to level not previously seen.
Market predictions for consumer spending this holiday season is for new spending records. One thing remains to be seen is how this spending will be paid for and whether credit card delinquencies will continue to rise in 2024. We will continue to monitor industry news, and bring you the latest information that can help you make better decisions for your business. Follow us here for more.
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