Study on store credit card rates

Congressman Weiner wants rates to come down
March 19, 2008 2:57:02 PM PDT
If you have ever been checking out at a store and been asked if you want one of their credit cards, you should know about their interest rates. According to one local congressmen, they are much higher than standard credit card rates and he wants to do something about that. You get to the cash register and the clerk asks you if you want to apply for a store credit card. what's the first question you should ask?

Congressman Anthony Weiner did a study of store credit cards and found they were sky high.

"If someone tried to loan you money for 25 percent in New York, they consider you a loan shark. These guys are getting very close," said Weiner.

Weiner has introduced legislation to make stores post their credit card's interest rate right at the cash register where you can see it. At one store Eyewitness News visited, we asked a saleslady their interest rate, but she didn't know until we pointed it out to her in her own literature.

Stores also lured you into getting their cards with tempting teaser rates, but after a few months the charges can skyrocket.

"One of the most dangerous and pernicious things about the teaser rates ins sometimes you'll see no interest for 6 months. But if on that 6th month and 1 day, you have not fully paid it off, you pay the entire amount as if you've been paying interest all those days," adds Weiner.

Victoria Secret and The Gap told us a regular visa or mastercard will often have an interest rate of about half of a store credit card so you can save money by using those. But the best advice is don't buy more than you can pay off in full each month.

That way interest rates are not an issue.