Shopping for bargains at discount stores makes financial sense, so long as one isn't running up a tab on a store-branded credit card with an exorbitant interest rate.

While the Federal Reserve recently cut interest rates again in a bid to boost U.S. economic activity by lowering borrowing costs, that easy money mindset is not being shared by issuers of retail credit cards. The average store card's annual percentage rate, or APR, is now 26.01%, up 0.37 percentage points from a year ago and almost five whole percentage points higher than the average overall credit card APR of 21.1%, according to a report out Thursday.

Store-only cards' average APR climbed 0.29 percentage points, or 29 basis points in banker parlance, to 27.52% this year, while the average co-branded card APR is slightly lower at 23.39%, up 33 basis points from 2018, a review of 88 cards from 64 retailers by CreditCards.com found.

The worst offender, at least from the view of a consumer carrying a balance, is appliance and home-furnishing retailer Brandsource, with an APR of 30.24%. The just-under-30% crowd includes Big Lots, Piercing Pagoda, Zales, Discount Tire, Sterling Family of Jewelers, Jared and Kay Jewelers, all of which now have APRs of 29.99%, the survey found.

Get Breaking News Delivered to Your Inbox

"The 30% threshold definitely seems to be an important psychological barrier," according to Ted Rossman, industry analyst for CreditCards.com, who noted the cards are issued from banks headquartered in states that don't have a maximum card rate. "They could charge more, but they're choosing not to."

Reasons to say no

While store credit cards at times defer interest for six months or more to entice consumers to apply, consumers should be wary, as once the deferred period ends, the interest is charged retroactively to the account unless the entire balance is paid off, Rossman cautioned.

"You'd be better off with a 0% offer from a general-purpose card because those don't tend to charge deferred interest," he stated.

About two-thirds, or 66%, of adults in the U.S. have applied for a retail credit card, with older generations more likely to do so than those in their 20s and 30s, according to CreditCard.com. The most popular reason cited was getting a discount or sign-up bonus, but Rossman advised consumers to consider the potential cost down the road, saying, "there's a good chance they'd be better off with a general-purpose rewards card."

A third of respondents said they applied for store cards because they loved the brand, a logical reason so long as the balance is paid in full each month and the plastic comes with competitive rewards.

"Retailers such as Amazon, Target, Best Buy, Gap and Ann Taylor all give their cardholders 5% cash back, which is typically better than you'd get on a general-purpose card," Rossman noted.

And 11% applied because they felt pressured by a store clerk, according to the findings. "That 11% extrapolates to about 18 million people getting a credit card for the wrong reason," Rossman said. He advised consumers to tell pushy clerks they'll "think about it" and use whatever's already in their wallet.