Suzanne Kapnar and Imani Moise of The Wall Street Journal report that consumers are shifting away from store credit cards as brand loyalty wanes and interest rates rise. They write:
Retailers aren’t just having trouble getting shoppers to buy sweaters and other holiday items this season. Store credit cards are also a tougher sell.
The cards, which typically can only be used at a particular chain, have been a lucrative source of revenue for retailers as merchandise sales have slowed. But the stream is drying up as Americans carry fewer cards and increasingly finance purchases with buy now, pay later providers. Interest rates surpassing 30% on some retailers’ credit cards aren’t helping, according to analysts.
The payment shifts add to the challenges many retailers face this holiday shopping season as they look to clear out inventory and preserve profits.
So far there are signs that U.S. shoppers are shelling out cash on gifts and other items. More shoppers visited stores and online spending grew on Black Friday this year compared with last year, according to third-party analytics firms. […]
Alex Capozzolo, a 31-year-old real-estate investor, has store cards from Home Depot, Target and Crate & Barrel, but he doesn’t want any more. “They are hard to keep track of,” said the San Diego resident. “I don’t want to risk missing a payment and owe all that interest.”
Read more here.
