Fed Rates Near Zero Didn’t Make These Credit Cards Any Cheaper

Christel Deskins

(Bloomberg) — U.S. retailers’ credit cards with the highest cost of borrowing kept the same rate in 2020 as last year even as the Federal Reserve slashed interest rates to near-zero, a report found. © Bloomberg Mastercard Inc. chip credit cards are arranged for a photograph in Washington, D.C., U.S., […]

(Bloomberg) — U.S. retailers’ credit cards with the highest cost of borrowing kept the same rate in 2020 as last year even as the Federal Reserve slashed interest rates to near-zero, a report found.



a close up of a keyboard: Mastercard Inc. chip credit cards are arranged for a photograph in Washington, D.C., U.S., on Monday, Oct. 24, 2016. Mastercard Inc. is scheduled to release earnings figures on October 28.


© Bloomberg
Mastercard Inc. chip credit cards are arranged for a photograph in Washington, D.C., U.S., on Monday, Oct. 24, 2016. Mastercard Inc. is scheduled to release earnings figures on October 28.

Credit cards from Big Lots Inc., Discount Tire and several jewelry retailers issued by Comenity Bank and Synchrony Financial maintained annual rates of 29.99%, creditcards.com said Monday in a statement. Ted Rossman, an analyst at creditcards.com, said two cards from Nordstrom Inc. issued by Toronto-Dominion Bank increased their average rates this year.

Loading...

Load Error

Those retailers were exceptions, as most other cards cut rates from last year, according to the report from creditcards.com, an online marketplace and information hub. The average retail rate fell to 24.43% from 26.01%.

Retailers may be concerned about delinquencies during the coronavirus pandemic, and the high rates show the danger of applying for a card without thinking through other options, Rossman said in an interview. A consumer survey commissioned by creditcards.com found that 43% of U.S. adults have impulsively applied for a card at checkout.

“This should really be a last resort,” Rossman said.

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.

Continue Reading
Next Post

Jobs with biggest recoveries or losses since the start of pandemic

The US economy seems to be in a “K-shaped” recovery, where recovery is unequal among earners and job sectors. For instance, US Chamber of Commerce President Suzanne Clark, wrote in a post that financial services has mainly recovered, while the leisure industry has only brought back about 74% of its […]