These retailers have all increased the interest rates on their store cards

The Street

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and some retailers are making an unpopular move.

Transcript

00:00I'm Conway Gittins reporting from the New York Stock Exchange.

00:02Here's what we're watching on the street today.

00:04There's a trading bias towards economically sensitive stocks this Friday with signs the

00:09mighty U.S. consumer is not tapped out.

00:13The latest example is coming from Gap Inc.

00:15The parent company of the Gap and Old Navy says the holiday shopping season is off to

00:19a strong start and it raised its outlook for the year.

00:24Sticking with retail, if you're doing your holiday shopping with a retail branded credit

00:28card, your final purchases might end up costing you more than you think.

00:33Interest rates on store branded credit cards are at an all-time high, even though the Federal

00:39Reserve started cutting its key lending rate in September.

00:42Retailers are trying to protect the hefty margins they make every time you swipe with

00:47their card.

00:48According to Bankrate, the retailers with the highest private label credit cards as

00:53of September were Big Lots, Burlington and Petco.

00:57Each of those cards came with an eye-popping 35.99% annual percentage rate or APR.

01:05Some retailers have lowered their rates in recent months, but credit cards from the likes

01:09of Macy's, Nordstrom, The Gap and TJX still sit way above the cost of a traditional credit

01:18card.

01:19So why the discrepancy?

01:20If you ask the companies, you'll get a lot of corporate mumbo-jumbo, but the bottom line

01:23is they charge as much as they do because they can.

01:28Shoppers are a captivated audience and are easily lured with initial discounts and convenience.

01:34Signing up for a store credit card takes minutes, but if you carry a balance, what you saved

01:39in time could ultimately cost you hundreds in interest payments.

01:44That'll do it for your daily briefing from the New York Stock Exchange.

01:47I'm Conway Gittins with The Street.

01:53Thanks for watching.

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