The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards , or use our CardMatch™ tool to find cards matched to your needs.

Editor’s note: For the most recent retail card study findings, see “2016 Retail Card Survey: APRs climbing, sign-up deals fading.”

Heading out to shop? The cost of borrowing from your favorite retailer has gone up: The average APR on the credit cards from America’s largest retailers has climbed more than 2 percentage points to 23.23 percent, according a CreditCards.com survey. That’s more than 8 points higher than the national average for general-purpose cards.

It’s not just the rates that have expanded since 2010, when the survey was last conducted. The 2014 retail credit card survey reveals that many retailers have broadened their credit card programs to include more card options and a bigger array of discounts and other perks to encourage spending.

In all, the survey portrays a market segment that is offering better rewards to consumers who can pay off their shopping sprees and bigger debts to those who don’t.

(See survey details,CreditCards.com 2014 retail credit card survey data.)

Despite high interest rates, consumers love their retail cards. According to the Federal Reserve, the market for private-label retail cards alone is huge, accounting for approximately $270 billion in sales last year.

CreditCards.com’s review encompassed the top 100 retailers by sales volume, as tracked by the National Retail Federation. Out of the 100 retailers, 36 offer credit card programs (Survey methodology).

The surveyed retailers offer 61 cards within their consumer credit programs, including two debit cards, 32 store-only cards and 27 general purpose (known as co-branded) cards. The average APR of these cards is 23.23 percent, marking a 2.01 percent increase from the 2010 average APR of 21.22 percent. The November 25 average for new card offers is 14.98 percent, and low-rate cards average 10.37 percent.

High rates make a difference. A consumer who puts a $1,000 balance on the average retail credit card and makes only the minimum payments would need 73 months to pay off the balance and would incur $840 in interest fees. Someone who puts the same splurge on a card with the average low rate of 10.37 percent would pay just $232 in interest — and be out of debt 17 months sooner.

Other highlights from the 2014 retail store card survey:

The 27 use-anywhere cards are, on average, a better deal for consumers who carry a balance. They have an average APR of 21.63 percent. The 32 in-store-only cards check in at an average APR of 24.48 percent.

13 retailers offer a range of rates to consumers, based on creditworthiness.

22 retailers offer some type of introductory interest offer or reward with credit program approval.

Rewards are becoming more complicated. Three large retailers — Macy’s and JCPenney — have tiered programs with multiple levels, offering premium perks and elite status for high-spending cardholders. Others, including Kohl’s, Gap, Best Buy and Target, have “upgraded cardholder” perks systems similar to tiers.

Jonathan Gelfand, managing director of financial services company Partner Advisors, predicts the trend toward expanded retail card offerings will continue, especially as the economy and consumer spending confidence improves.

“Credit cards have become more appealing and the retail market offers many doors to new credit program opportunities,” he said. “I think this area will continue to be hot.”

Rise of the APR

Since the 2010 survey, store card APRs have been on the rise.

RETAIL CARDS:

BY THE NUMBERS Highest APR: Zales, 28.99 percent.

Zales, 28.99 percent. Biggest increase: Toys R Us/Babies R Us co-brand, up 5.75 percent to 26.99 percent.

Toys R Us/Babies R Us co-brand, up 5.75 percent to 26.99 percent. Lowest APR: OfficeMax, 8.99 percent.

OfficeMax, 8.99 percent. Biggest APR decreases: Signet Jewelers. Three of its four cards are down 7.99 percent (from a flat 24.99 percent APR to a 17-24.99 percent APR range).

High APRs on private label retail cards are not unusual, but current rates can be attributed to a retailer needing to bounce back from industry stressors, says Madeline Aufseeser, a senior analyst with financial research firm Aite Group.

“The retail credit card market is not as profitable as it used to be as a result of the combination of the CARD Act, the overall market economy and also consumer spending behavior,” she says.

The Credit CARD Act of 2009 placed limits on how often card issuers can change fees and interest rates. In an effort to make up for lost profit, many issuers raised their cards’ APRs. And, as consumer spending habits declined in response to the recession, some retailers resorted to boosting APRs to add to their revenue stream.

But even with the economy stabilizing and any fallout from the CARD Act behind them, store card rates aren’t expected to drop anytime soon, according to Gelfand. In fact, when the Federal Reserve begins raising rates, which it has announced its intention to do in 2015, store cards — along with all forms of credit — will become more costly.

“Interest rates will continue to rise because one of the key drivers [of an interest rate increase] is the prime rate,” he said. “Almost all store card account [APRs] are based on the prime rate plus predictions.”

The prime rate, established by the Wall Street Journal and based on a survey of the 10 largest U.S. banks’ corporate interest rate offers, sets a basis for interest charges on loans and lines of credit. The majority of credit card holders are charged the prime rate, which is currently 3.25 percent, plus an additional percentage set by the issuing bank and often based on applicant creditworthiness.

Right now, consumers with good credit may find slight relief from high store card APRs in co-branded card offers, many of which offer variable rates closer to that of the national average APR for general purpose cards — about 15 percent. For example, consumers with good credit may be eligible for a 10.90 percent APR Nordstrom credit card versus someone with poor or little credit that may offered a significantly higher 22.90 percent APR.

You don’t have to be afraid of high store card APRs, so long as you can pay off your accumulated balance at the end of each billing cycle. If you don’t carry a balance, the APR doesn’t matter, says certified credit counselor Jonathan Gideon.

Growing emphasis on co-branding

The days of retailers offering a single private-label credit card are dwindling.

CARD TYPES DEFINED Co-branded: Cards sponsored by a retailer and a bank or card network such as Visa, MasterCard, Discover or American Express. These cards can be used at both the issuing retail store and anywhere else the card network is accepted. Private label: Store-only credit cards are issued by a retailer partnered with a payment processor and can only be used within a designated retail network. Debit: Retailer-issued debit cards are tied directly to your checking account. These cards allow you to get some of the perks associated with a retail store card without opening a line of credit.

Of the 36 retailers surveyed this year, only 12 offer just a private-label store card. There were 17 such cards in 2010.

Many stores have partnered with the large payment networks, such as Visa, MasterCard and American Express, to include at least one use-anywhere card option in their credit programs. For example, in 2010, Best Buy had just one private-label store card offer available to consumers. Today, Best Buy offers two store cards and two co-branded MasterCard options, which are issued based on applicants’ creditworthiness.

For retailers looking to give their credit card programs a boost in loyalty, revenue and consumer appeal, co-branding is a good option, says Pam Lloyd, MasterCard’s senior vice president for global product development and consumer products.

“Co-branded programs are highly successful in driving brand awareness, loyalty and engagement as well as increasing sales,” she says.

Co-branded cards are attractive to consumers who want the benefits of a store credit card, but don’t want to be limited in their purchasing options. Plus, the more consumers can spend, the greater the profit margin for retailers, which is a win-win, says Partner Advisors’ Gelfand.

“Co-branded cards are largely funded through the interest rates people pay and also the [transaction] fees other merchants outside the store network pay when people use their cards there,” he says. “Private label cards tend to have lower profit margins since they can only be used at a small number of locations,” adds Gelfand.

Spend more, get more

Introductory offers abound to entice cardholders into even more opportunities to spend and “save.”

Of the 36 surveyed retailers, 22 offer special introductory financing rates and/or instant rewards to approved credit program applicants, such as 0 percent APR for six months or 20 percent off the first card purchase.

While a quick 20 percent off might be enough to get a consumer to apply for a card for a single splurge, retail store cards need to offer more to keep their cardholders engaged long-term, says Stephanie Cohen, a former MasterCard vice president and a partner in LoyaltyOne Consulting, a Richmond, Virginia designer of loyalty programs.

New trend: Tiered rewards

A new development in this year’s CreditCards.com survey is tier-based loyalty programs that use exclusive rewards to encourage consumers to keep spending.

TOP 5 HIGHEST, LOWEST APR OFFERS Highest: Zales – 28.99% Office Depot Personal Credit: 27.99% Staples Personal Account: 27.99% My Best Buy credit card: 25.24-27.99% My Best Buy preferred credit card: 25.24-27.99% Lowest: OfficeMax Visa Signature Card: 8.99-17.99% Army Air Force Exchange Military Star card: 10.24% Nordstrom retail card: 10.90-22.90% Nordstrom Visa Signature Card: 10.90-22.90% Williams-Sonoma Visa Signature Card: 13.74-21.74%

Nordstrom and Macy’s are two of the biggest stores now using tiered loyalty programs. Their cardholders can move up the loyalty ranks — often described with words such as “elite” and “preferred” — simply by spending more money. Every new level grants access to more cardholder benefits and discounts.

Loyalty program experts believe this type of program structure will soon show up at other retailers because when combined with an introductory offer, tiered rewards can be very effective.

“The continued engagement and recognition given at each level is what drives people to continue their program involvement,” LoyaltyOne’s Cohen says. “People will go to extremes to get to the next tier just for that recognition alone.”

However, these multilevel, long-term rewards programs run the risk of becoming difficult to understand, which could have a negative effect on consumer engagement, she adds.

“What we have found is that some programs are so complex that people don’t engage because they don’t understand it,” Cohen says. “You don’t want consumers to be like, ‘It’s hurting my head to try and figure this out so I’m just going to disengage.'”

Making the benefits of retail store credit cards simple and clear will be crucial for retailers as loyalty programs continue to develop, especially when consumers face higher-than-average interest rates.

“Once interest charges are applied toward the account, any potential rewards, bonuses or discounts earned could be quickly negated and you could end up paying much more in the end for the purchase,” says credit counselor Gideon. “You don’t have to avoid the cards, just be careful.”

Survey methodology

The 2014 Retail Credit Card survey was conducted in July 2014 by CreditCards.com using the retail credit card terms and condition agreements of 61 cards from 36 different retailers. The retailers were selected based on the 2014 National Retail Federation chart of Top 100 retailers based on 2013 sales. All retailers from that database that offer a retail credit card program were selected for study. Collected data points included APR, rewards program details, introductory offers, co-branded partnerships, number of cards included in programs and their names.

The 2014 average APR was determined using the APR data listed in each card’s terms and conditions document. APRs noted as ranges to be issued based on applicant’s credit were averaged and then the averages of those ranges were used in a standard average formula comprised of 58 numbers (less two debit cards and one other credit card with an unlisted APR).

See related:2014 CreditCards.com retail credit card survey data, Wal-Mart store card switch gives consumers reason to compare, Make sure your first card is a good fit