Store cards charge higher interest rates

Woman holding credit cards

Stores employ all sorts of gimmicks to get customers to sign up for their credit cards.

What they hope you won't notice is the interest rate.

While the typical Visa or MasterCard is charging 13% to 14% a year right now, store cards typically are charging more than 20%.

The higher rate adds $70 or more a year to your interest costs for every $1,000 worth of debt on the card.

The only time retailers ever mention the interest rate on their cards is when they try to reel you in with offers to "pay no interest" for a year, or even two years, on major purchases.

But these deals almost always come with a big catch.

If you don't pay off every cent of the purchase by the deadline, you'll be billed for all of the interest on the entire purchase price all the way back to the purchase date. In one example we saw, that rate was a whopping 29.99%.

Before succumbing to a high-pressure sales pitch, take a look at our 7 reasons why you should resist getting a store credit card.

If you're looking to get out of debt, our credit card calculator can help you map out a payment plan and see exactly how much you'll save in interest charges.

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