Store credit cards give big boost to retail industry
This holiday season, consumers will likely find a big push on behalf of retailers to sign up new customers to their credit cards.
Recently, Target reported a 50 percent increase in spending by shoppers who use its branded credit card, sending a spark throughout the retail industry. In addition, the programs are likely to form a new temptation for consumers looking to increase their savings and reduce debt this winter.
Retailers are also offering easier approvals than ever before. The cards, which tend to have lower limits and higher interest rates, are a low risk for retailers and can also provide consumers with poor credit scores an easy access to credit, The Palm Beach Post reports.
“Retailers make more money when consumers spend on their credit cards, so they offer good incentives in a quest to get people to use the store credit card,” Kit Yarrow, a consumer psychologist told The Palm Beach Post. “It’s only natural that consumers be enticed by that, especially at a time when we’re more cost-conscious.”
Some are beginning to change marketing tactics as consumers continue to worry about debt, presenting the cards as a cash-management tool, the news source says. However, consumers may wish to examine the cards carefully before applying.