Dozens of retailers jacked up interest rates on store cards ahead of Fed cuts
Source: NBC News/CNBC
Nov. 22, 2024, 10:52 AM EST / Source: CNBC
Dozens of the largest U.S. retailers and their bank partners jacked up interest rates on their store-branded cards to record highs in the months before the Federal Reserve began cutting rates, as the companies looked to pad profits during a stretch of sluggish sales. At least 50 companies — including Big Lots, Gap, Petco, Burlington, Macy’s and TJX Companies — increased the APRs on their credit cards between September 2023 and September 2024, according to a review of data gathered by Bankrate.com that examined the nation’s 100 largest retailers.
Bankrupt home goods chain Big Lots raised its APR by 6 percentage points from 29.99% to 35.99% — the largest increase out of the retailers reviewed by Bankrate. Gap made the second largest increase, a 5 percentage point hike on its Banana Republic, Athleta, Old Navy and namesake cards. Petco came in third with a 4.5 percentage point increase. Big Lots, Academy Sports, Burlington, Michael’s and Petco are tied for having the highest APR among the companies Bankrate tracked, at a staggering 35.99% as of September.
“Up until this rate hiking cycle that we saw from the Fed in 2022 and 2023, 30% was a threshold that few credit cards dared to cross,” Ted Rossman, Bankrate’s senior industry analyst, told CNBC. “But they’ve gone from high to higher these past few years because the Fed pushed rates higher by five and a quarter points and all of a sudden, 29.99% was not the high end anymore. Now we see it’s very common for these store cards to charge over 30%.”
However, it’s not just monetary policy pushing APRs higher. Just before the Fed began its rate-cutting cycle in September, many retailers and their bank partners raised interest rates on their store cards to protect their profits when the federal funds rate — which determines their own interest rates — came down.
Read more: https://www.nbcnews.com/business/consumer/dozens-retailers-jacked-interest-rates-store-cards-ahead-fed-cuts-rcna181348
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At even half of those rates. Nothing there is a necessity.
The folks who install card skimmers are notorious for planting them at gas stations. Always pay cash when you purchase gas.
Always go inside the bank, if you need to use an ATM. Never use ones that are outside the bank.
The card skimming folks love to hit the outdoor ATMs as well.
Just a little public service announcement for fellow Democrats. 
I rarely use the ATM at my bank. I'll try to use cash for my gas. I like to fill it, but sometimes, don't give them enough. Or give them too much cash and have to go back for change. I'm a lazy old thing
I learned my gas gauge. When it got to a certain point, I knew if $20 or $40 was going to fill it up, based on how low the tank was at that point.
Rarely had to go back inside to get change.
I live in fire country, so my tank never goes below half full. Always need to know I can get out.
I know that for millennia, people/businesses have negotiated "loans" (at various rates), but with respect to the more formalized and somewhat "regulated" version of that, it apparently started in the U.S. during WWII, where what was dubbed "Regulation W", began a process to reign in inflation and regulate the interest rates on the credit/"revolving" accounts that started popping up - https://www.federalreservehistory.org/essays/feds-role-during-wwii
Subsequent laws modified this and over the years, states started regulating how much they could charge for interest rates, enacting anti-usury laws. And then a major case hit the SCOTUS - Marquette National Bank of Minneapolis v. First of Omaha Service Corporation, which upended the process when it came to "nationally chartered" banks, where those that offered cards in any state, could domicile in a state allowing them to charge a higher rate than others, but have that rate apply in any other state, regardless of what that state's "max" rate was by state law.
You would see many South Dakota and Delaware-domiciled banks here in the U.S. because of that.
In any case, the Diner's Club card was supposedly the first "credit card" (starting ~1950), but with the amount paid off each month. Eventually there were cards with "revolving" credit (balances carried over month to month).
What I found ironic is that I remember when my agency began to transition from doing "cash advances" for lodging/meals/transportation when going on trips (I think either in the late '80s or early '90s), to use a "government credit card" (GSA contract), which that first go-around, was a Diner's Club card. The nightmare of that card was that so few places took them.
Over the years, the contract cards changed to be American Express, then Mastercard, etc.