topic Re: Consumers are finally saying no to costly retail credit cards in Credit in the News

Consumers are finally saying no to costly retail credit cards

MarkintheHV — Wed, 29 Nov 2023 17:42:29 GMT

https://creditnews.com/economy/consumers-are-finally-saying-no-to-costly-retail-credit-cards/

I guess the rest of the public is starting to figure out what we have known all along.

Some highlights:

Retail credit cards charge more than 30% interest on purchases, much higher than the 21% average for general-purpose cards.
The pandemic also accelerated the shift from in-store to online shopping, reducing signups at the check-out counter. Stores like Target and Neiman Marcus have complained about this.

store credit cards initially appealed to subprime shoppers because they provided easy access to credit.
subprime borrowers are already falling behind on credit payments due to high interest rates and rising costs.

Re: Consumers are finally saying no to costly retail credit cards

Anonymalous — Wed, 29 Nov 2023 18:17:19 GMT

I don't think most people check the interest rate before they apply, so I doubt that's a factor. But the reduction in opportunities to push cards at the counter probably has a big effect, because it's an impulse buy targeted at a moment of weakness.

It's not mentioned at all, but I wonder if the finfluencers have had any effect, because they relentlessly promote bank cards while disparaging retail cards.

Re: Consumers are finally saying no to costly retail credit cards

flexin222 — Wed, 29 Nov 2023 18:45:20 GMT

Great post! My Black Friday spending was paying down debt which is a gift that keeps on giving. I recently signed up for Venmo for paying laborers and they approved me for a Venmo card. Upon checking and seeing their apr which If I remember correctly was 29 percent...I leaned back, inhaled and clicked right off it. I also, refuse to get retail cards. Just waited till my birthday in October and asked for credit increases which was no problem since I don't spend much. Been gardening for what seems like years and I really gotta update my profile...I'm such a lazy retiree..lol

Re: Consumers are finally saying no to costly retail credit cards

Horseshoez — Wed, 29 Nov 2023 18:52:06 GMT

@flexin222 wrote:
Great post! My Black Friday spending was paying down debt which is a gift that keeps on giving. I recently signed up for Venmo for paying laborers and they approved me for a Venmo card. Upon checking and seeing their apr which If I remember correctly was 29 percent...I leaned back, inhaled and clicked right off it. I also, refuse to get retail cards. Just waited till my birthday in October and asked for credit increases which was no problem since I don't spend much. Been gardening for what seems like years and I really gotta update my profile...I'm such a lazy retiree..lol

I'm curious why folks are thinking an APR of 29% is high these days almost constant interest rate hikes by the FED; with the exception of my one PenFed credit card, all of my bank cards have APRs which range from 27% to 31%. Personally I could care less, I don't carry balances and don't pay any interest, so the APR could be north of 50% and it still wouldn't impact me.

Re: Consumers are finally saying no to costly retail credit cards

CreditCuriosity — Wed, 29 Nov 2023 20:01:49 GMT

@Horseshoez wrote:
@flexin222 wrote:
Great post! My Black Friday spending was paying down debt which is a gift that keeps on giving. I recently signed up for Venmo for paying laborers and they approved me for a Venmo card. Upon checking and seeing their apr which If I remember correctly was 29 percent...I leaned back, inhaled and clicked right off it. I also, refuse to get retail cards. Just waited till my birthday in October and asked for credit increases which was no problem since I don't spend much. Been gardening for what seems like years and I really gotta update my profile...I'm such a lazy retiree..lol
I'm curious why folks are thinking an APR of 29% is high these days almost constant interest rate hikes by the FED; with the exception of my one PenFed credit card, all of my bank cards have APRs which range from 27% to 31%. Personally I could care less, I don't carry balances and don't pay any interest, so the APR could be north of 50% and it still wouldn't impact me.

Might not impact you, but say you did have a balance and financial situation were to change would you rather pay 15-20% interest or 30% interest as a consumer? As quite the difference. I have over 30 cc's and most of them are in the 17-21% range some are sub 10% such as the gold standard AOD 3% cash back card 7.49 fixed apr and other sub 10% cards as well and as mentioned some in the 17-21 range and I do have a best buy visa I think at 30.49% as well. I know which one if I was to get in a crunch in I would be charging to personally. If I could predict everything in life I would of been already retired

Re: Consumers are finally saying no to costly retail credit cards

Horseshoez — Wed, 29 Nov 2023 20:07:21 GMT

The difference between us is I refuse to maintain more than a few cards, so they're easy to manage, and on the off chance I screw up, a few dollars in interest isn't going to hurt.

Re: Consumers are finally saying no to costly retail credit cards

LADave — Wed, 29 Nov 2023 23:47:23 GMT

@MarkintheHV wrote:
https://creditnews.com/economy/consumers-are-finally-saying-no-to-costly-retail-credit-cards/

I guess the rest of the public is starting to figure out what we have known all along.

Some highlights:
Retail credit cards charge more than 30% interest on purchases, much higher than the 21% average for general-purpose cards.
The pandemic also accelerated the shift from in-store to online shopping, reducing signups at the check-out counter. Stores like Target and Neiman Marcus have complained about this.
store credit cards initially appealed to subprime shoppers because they provided easy access to credit.
subprime borrowers are already falling behind on credit payments due to high interest rates and rising costs.

It's about time. With so many credit options these days, having easy access to credit at a particular store just isn't enough. I won't sign up for any card unless it means more money in my pocket somehow, either through 0% financing or enhanced rewards or a combination of both. Of course, I realize that I'm also an outlier.

Re: Consumers are finally saying no to costly retail credit cards

markbeiser — Wed, 29 Nov 2023 23:49:38 GMT

Fortunately I'm in a position to not care about the APR on cards, even a little bit.
I pay my balances in full before the statements cut. So if I need a few weeks to pay something, I can let it go to the statement date and pay it on the due date.
If I need longer than that, I can pay off CCs with my HELOC that is at prime+0%.

I've gotten in trouble with a store card years ago, never again!

Re: Consumers are finally saying no to costly retail credit cards

flexin222 — Thu, 30 Nov 2023 18:36:11 GMT

Hey Horseshoez, Creditcuriosity is right and I'm carrying debt on cards. Imagine being on a fixed income and needing appliances after a home purchase. Then, transferring high apr balances to the lower cards to lessen the money these card companies can make off you in interest. You still have to pay transfer fees and that balance, which could take a year or 2. It sucks, but what kills me the most is that even with investments you can't just take out money to pay off balances and crypto is being taxed like we're rich. Those high APR's you're talking about is a Discover card and with my present scores around 750's, I shouldn't be punished for it. I wonder what's the lowest APR our members have on Discover?

Re: Consumers are finally saying no to costly retail credit cards

CreditCuriosity — Thu, 30 Nov 2023 18:47:28 GMT

@flexin222 wrote:
Hey Horseshoez, Creditcuriosity is right and I'm carrying debt on cards. Imagine being on a fixed income and needing appliances after a home purchase. Then, transferring high apr balances to the lower cards to lessen the money these card companies can make off you in interest. You still have to pay transfer fees and that balance, which could take a year or 2. It sucks, but what kills me the most is that even with investments you can't just take out money to pay off balances and crypto is being taxed like we're rich. Those high APR's you're talking about is a Discover card and with my present scores around 750's, I shouldn't be punished for it. I wonder what's the lowest APR our members have on Discover?

think 16.24 at the moment on discover purchase APR and that is below published APR of 17.24.. Some might have lower than me if it is a really old account.

Re: Consumers are finally saying no to costly retail credit cards

BuckyB — Tue, 19 Dec 2023 18:17:24 GMT

Yup, standard cards are now at the same interest rates as store cards. I don't see anything other than credit union cards anywhere under 25% and that's only because they have to be at 18 or below by law.

Re: Consumers are finally saying no to costly retail credit cards

mgood — Sat, 06 Jan 2024 17:46:12 GMT

@flexin222 wrote:
I wonder what's the lowest APR our members have on Discover?

I have 2.90% until mid March I think that was a targeted offer. My regular rate is 28.24% on that Disco.

Not paying them any interest anyway, so it doesn't really matter.

Re: Consumers are finally saying no to costly retail credit cards

Brian_Earl_Spilner — Sat, 06 Jan 2024 17:54:19 GMT

Article is right, people are steering away from store cards. What it fails to mention is how much of that spend has shifted to things like pay in 4, klarna, and affirm.

Re: Consumers are finally saying no to costly retail credit cards

LADave — Sat, 06 Jan 2024 21:30:11 GMT

@Brian_Earl_Spilner wrote:
Article is right, people are steering away from store cards. What it fails to mention is how much of that spend has shifted to things like pay in 4, klarna, and affirm.

That's a great point, and one I can't believe I missed until you pointed it out.

It could work out for consumers if they make the payments in full and are on plans that will give them 0% interest over a few payments. In the worst-case scenarios, it could be a lot worse than simply getting a store card - if it shows up as a new credit account (lowering their average age of accounts), especially if that's combined with missed payments.

Re: Consumers are finally saying no to costly retail credit cards

Brian_Earl_Spilner — Sat, 06 Jan 2024 21:46:56 GMT

@LADave wrote:
@Brian_Earl_Spilner wrote:
Article is right, people are steering away from store cards. What it fails to mention is how much of that spend has shifted to things like pay in 4, klarna, and affirm.
That's a great point, and one I can't believe I missed until you pointed it out.

It could work out for consumers if they make the payments in full and are on plans that will give them 0% interest over a few payments. In the worst-case scenarios, it could be a lot worse than simply getting a store card - if it shows up as a new credit account (lowering their average age of accounts), especially if that's combined with missed payments.

It depends on who they use. For example, affirm only reports to EX so the other 2 are unaffected. I don't really care about the cfa tag so I financed my wife's last 2 phones through affirm directly from the manufacturers. 0% for 12 and 24 months respectively is a lot better than what it would have cost on my cards, especially since I was rebuilding and the apr were high.

Re: Consumers are finally saying no to costly retail credit cards

youngandcreditwrthy — Mon, 08 Jan 2024 18:00:51 GMT

when I opened my CSP it ws 15.24.. I think it's still less than 20%, but the new CSP cards are opening at 28.49%... so even "prime" cards are charging roughly 30%. almost all of capital ones cards are over 30% even the ultra ultra prime ones.

when carrying a balance, your best bet is to balance transfer or PIF. personally, I pay everything in full. This is not the environment to carry a balance in.

before 2008, you could get regular 1-2% APR reductions and CLI simultaneously every 6 months. I had a cap one card with 9.24% then in 2010 they raised it to 13.9 then to 17.99.

its rediculous that we can't get our interest rates fixed or back down to the pre GFC days. It doesn't make sense that rates seem to be increasing for eternity with or without federal reserve intervention.

otoh, higher rates allow banks to approve more credit cards, and if you PIF.. it doesn't matter, but at some point in life.. everyone experiences a financial emergency so rates DO MATTER for EVERYONE.

Re: Consumers are finally saying no to costly retail credit cards

Thomas_Thumb — Mon, 08 Jan 2024 20:12:46 GMT

@Brian_Earl_Spilner wrote:
Article is right, people are steering away from store cards. What it fails to mention is how much of that spend has shifted to things like pay in 4, klarna, and affirm.

Perhaps not so much steering away as market saturation. The pusherman at companies like Best Buy has secured his clientele and now sees increased resistance from the just say no crowd. It is unfortunate the pusherman continues getting hammered by the company Man to hook more customers into using the product.

No more pusherman, I'm doing my business online.

Re: Consumers are finally saying no to costly retail credit cards

Horseshoez — Mon, 08 Jan 2024 20:20:49 GMT

@youngandcreditwrthy wrote:
when I opened my CSP it ws 15.24.. I think it's still less than 20%, but the new CSP cards are opening at 28.49%... so even "prime" cards are charging roughly 30%. almost all of capital ones cards are over 30% even the ultra ultra prime ones.

when carrying a balance, your best bet is to balance transfer or PIF. personally, I pay everything in full. This is not the environment to carry a balance in.

before 2008, you could get regular 1-2% APR reductions and CLI simultaneously every 6 months. I had a cap one card with 9.24% then in 2010 they raised it to 13.9 then to 17.99.

its rediculous that we can't get our interest rates fixed or back down to the pre GFC days. It doesn't make sense that rates seem to be increasing for eternity with or without federal reserve intervention.

otoh, higher rates allow banks to approve more credit cards, and if you PIF.. it doesn't matter, but at some point in life.. everyone experiences a financial emergency so rates DO MATTER for EVERYONE.

That's kind of funny; recently CapOne lowered the interest rate on my SavorOne card, without me asking, from 29.74% to 26.74%. Meanwhile my CSP started out at 27.24% in late 2022 and is now 28.24%, go figure. That said, neither rate impacts me as I don't pay any interest on any of my cards.

Re: Consumers are finally saying no to costly retail credit cards

Pppoolboy — Mon, 08 Jan 2024 23:02:07 GMT

LOL I dont see any difference between 25%, 35%, 45% it will all send you to the poorhouse. If you're carrying balancds on cards over 0% you're doing it wrong.

Re: Consumers are finally saying no to costly retail credit cards

Linnaea — Tue, 09 Jan 2024 01:06:39 GMT

I have done Affirm and its never reported to and Credit Bureau. I know and heard others have.... it's a hit and a miss.

Also, to anyone that knows... if they can raise you.... do you think they will lower us significantly? Or do you think the Prime credit cards will stick it to the consumers and keep it high? I just never seen credit card companies lower significantly on a whole.