10 Worst Store Credit Cards You Should Avoid at All Costs

pile of credit cards
Some credit cards will end up costing you money. | iStock.com

Interest rates on store credit cards have hit records highs, according to a new report from CreditCards.com. The average store credit card has an APR of 23.84%, more than 8% higher than the 15.22% average interest rate for all credit cards.
Consumers might think the sign-up bonuses stores offer to get them to sign on the bottom line balance out the steep interest rates, but usually, those benefits aren’t that impressive. Only half of credit cards offered by the 100 largest retailers in the United States come with sign-up bonuses. When bonuses are offered, they’re usually stingy. Only 13 cards have a bonus worth more than $25 for a $200 purchase, the report found.
Shoppers who are tempted to bite when a clerk asks them whether they’d like to apply to open a new card would probably be better off using a regular credit card with rewards, according to CreditCards.com
“With their outrageously high APRs, most consumers would be wise to steer clear of these cards unless they’re 100% certain they can pay their balance off every single month,” Matt Schulz, CreditCards.com’s senior industry analyst, said in a statement. “And even then, there are plenty of general-purpose credit cards with better sign-up bonuses.”
The sign-up bonuses and perks on airline-branded credit cards are especially attractive right now, a separate CreditCards.com report found. Cards like the CitiAAdvantage Platinum Select and the British Airways Visa Signature card have bonuses of 30,000 to 50,000 miles if you meet spending targets in the first months after you open a card. That’s enough to get you a free, round-trip ticket, which could be worth several hundred dollars, depending on where you fly.

Store cards: Good deal or not?

credit card and bill
Weigh the pros and cons of the credit card. | iStock.com

Still, store credit cards can be a good deal in certain situations. The Target REDcard Credit Card offers 5% cash back on Target purchases, more than you’ll usually get from a general cash-back credit card, making it a good choice if you spend a lot of money at the big-box store. Costco’s Anywhere Visa Card by Citi has a relatively low APR for a store card (15.49%) and you’ll also earn 1% to 4% cash back on your purchases. The 10% rewards you’ll earn on the first purchase you make on your Best Buy credit card could save you several hundred dollars on an expensive item like a refrigerator or washer and dryer.
But you shouldn’t sign up for store credit cards just because the clerk is giving you the hard sell. Even if the sign-up bonus is generous, its value will quickly evaporate if you can’t promptly pay the bill. And if you have trouble managing credit, a new card could be a fast path to debt.
“You need to understand all the terms, and the potential collateral damage that you might cause yourself,” John Ulzheimer, credit expert at Credit Sesame, told the Today show. “If you’re going to carry a balance on that new card for even a couple of months, you’ll give back any sort of discount you received at the register — and then some — in the form of interest.”
Which cards will cause you the most pain? While virtually all store credit cards come with high APRs, these 10 had the highest interest rates, according to CreditCards.com.

1. Toys “R” Us

toys r us store
Toys “R” Us | Hiroko Masuike/Getty Images
  • APR: 26.99%

Toys can be expensive, and Toys “R” Us likely hopes to reel parents in with their credit cards, which offer rewards for money spent at the store and 10% off in-store on Thursdays when you use your card. But both the Toys “R” Us credit card (which can only be used in Toys “R” Us stores) and the Toys “R” Us MasterCard have a steep 26.99% APR.
To earn a significant amount of rewards, you have to spend a lot. You get 2 points for every $1 spent in store (and 1 point for every $4 spent anywhere else on the MasterCard). Once you have 125 points, you’ll get $5 in Toys “R” Us Reward Dollars.

2. Apple Store/iTunes

 Apple store
Apple store | Kena Betancur/Getty Images
  • APR: 14.24% to 27.24%

The Apple Rewards Card from BarclayCard US actually has one of the lower APRs of cards studied, but only if you have good credit. Those with less stellar credit histories may be stuck with an APR as high as 27.24%. You will earn points for spending (3 points for every $1 spent at Apple retail stores, 1 point for every $1 spent elsewhere). Once you have 2,500 points, you can cash them in for a $25 iTunes or Apple gift card.

3. Lane Bryant

lane bryant
Lane Bryant | Gerardo Mora/Getty Images for Lane Bryant
  • APR: 27.24%

Lane Bryant and other Ascena Retail Group stores (which include Catherines, Justice, and Maurices) all offer credit cards with 27.24% APRs. The rewards offered vary depending on the store. At Lane Bryant, you’ll earn points that can be redeemed for reward certificates, while at Justice, the card gives you 5% off all your purchases.

4. Dick’s Sporting Goods

dick's sporting goods
Dick’s Sporting Goods | Scott Olson/Getty Images
  • APR: 27.24%

Dick’s Sporting Goods offers two credit cards: one that can be used in-store only and a co-branded MasterCard. Both have an APR of 27.24%. The store doesn’t have sign-up bonuses but you can earn rewards, including points for purchases and up to 6% back. But make sure you read the fine print before you sign up; points expire annually on January 31, and you can’t use the “Rewards of Sport” store card for online purchases.

5. GameStop

Workers at a GameStop | Ethan Miller/Getty Images
  • APR: 27.24%

The GameStop PowerUP Rewards Credit Card has a 27.24% APR. With your first purchase, you’ll earn a bonus of 15,000 points if you’re a PowerUP Rewards Pro member and 5,000 if you’re a Basic cardholder. Five thousand points can be exchanged for a $5 merchandise credit.

6. TJ Maxx

tj maxx
TJ Maxx | Brendan Smialowski/AFP/Getty Images
  • APR: 27.24%

The TJ Maxx credit card has a 27.24% APR. You’ll earn 10% off your first online purchase after you sign up, as well as points for purchases at T.J. Maxx, Marshalls, HomeGoods, and Sierra Trading Post. The TJ Maxx Platinum MasterCard has the same interest rate and perks.

7. Williams-Sonoma

williams sonoma
A Williams-Sonoma store | Vivien Killilea/Getty Images for Caruso Affiliated
  • APR: 27.24%

The Williams-Sonoma store credit card has an APR of 27.24%. The sign-up bonuses are relatively generous – a $20 rewards certificate when you receive your new card and 20% off your first purchase. You’ll also get a $25 reward certificate during your birthday month and will earn points for purchases and get free shipping. But you’re better off if you can qualify for the Williams-Sonoma Visa Signature Card, which has an APR between 16.99% and 23.99%.

8. Staples

A Staples store | Joe Raedle/Getty Images
  • APR: 28.24%

Office supply giant Staples charges a hefty 28.24% APR on its in-house credit card. The store doesn’t offer any sign-up bonuses but you can earn up to 5% back in rewards on your purchases. You also get free shipping on orders over $14.99 and $2 back in rewards when you return ink cartridges for recycling.

9. Zales

Zales Jewelers | Justin Sullivan/Getty Images
  • APR: 29.24%

Using a store credit card to buy an engagement ring or other piece of expensive jewelry at Zales could cost you big if you’re not careful. The Zales credit card has a 29.24% APR. Late payments will cost you $37. However, you may be able to qualify for special financing for bigger-ticket purchases.
Zales is part of Signet Jewelers, which also owns Kay Jewelers and Jared. The interest rates on those stores’ credit cards are slightly lower – 17% to 26.99% — so if you must open a credit card to buy your sweetie a diamond, those may be a better bet.

10. Big Lots

big lots
The Big Lots’ logo on one of the store’s shopping carts | Tim Boyle/Getty Images
  • APR: 29.99%

Not only does Big Lots have the highest APR of any card in the Bankrate survey, but the store doesn’t offer any sign-up bonuses to shoppers. You can avoid sky-high interest charges on purchases over $250 if you pay off the bill within six months. (Purchases over $750 are interest-free for one year.)
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