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Retail credit cards, also known as private label cards or store credit cards, are a type of credit card dedicated to purchases with specific retailers. These cards have historically been associated with hardware stores and department stores, although they're increasingly available from merchants such as Amazon.
The size of the retail credit card market is much smaller than that of traditional credit cards available through banks and other financial institutions. Nevertheless, retail cards represent a meaningful share of the overall credit market. And more important for consumers, similar rules apply for managing retail cards as for other types of credit. How a consumer manages their credit history will impact their ability to obtain store credit, either in the form of a new line of credit or additional credit for a store card they already have.
Total Retail Credit Card Debt Continues to Decline
Retail card balances in the U.S. totaled $111.62 billion in the third quarter (Q3) of 2021, according to Experian data. That's a slight decrease from $114.86 billion from 12 months earlier and is a continuation of the decline from the previous year, as total balances fell a further 2.8%.
| Snapshot: Total Retail Credit Card Debt | ||||
|---|---|---|---|---|
| 2019 | 2020 | 2021 | 2020-2021 Change | |
| Total consumer retail credit card debt | $125.22B | $114.86B | $111.62B | -2.8% |
Source: Experian data from Q3 of each year
This decline of retail card balances mirrors that of credit cards issued by banks, which saw a decrease of 0.5% in 2021 to $784.5 billion—but shows signs of increasing this year, like other types of credit and loans. Inflation, a return to in-person shopping and an improvement in availability of durable goods such as appliances and electronic equipment will likely lift balances in 2022.
Average balances for retail card borrowers decreased from $1,068 in 2020 to $1,046 in Q3 2021, a much smaller decline than what was seen from 2019 to 2020.
| Snapshot: Average Retail Credit Card Balance | ||||
|---|---|---|---|---|
| 2019 | 2020 | 2021 | 2020-2021 Change | |
| Average consumer retail credit card balance | $1,171 | $1,068 | $1,046 | -2.1% |
Source: Experian data from Q3 of each year
This decline may have something to do with the longer-term trend of consumers (and retailers) moving away from store-based credit. In addition, newer financial products (particularly buy now, pay later plans) are taking aim at retail purchases that were typically one of the primary reasons consumers opened store accounts. Many retailers, in addition to offering store credit, are now considering offering buy now, pay later plans to qualified consumers, either alongside store credit or in lieu of it.
Balances Decline Significantly Among Those With Lowest FICO® Scores☉
Balances declined among those with poor, fair and good credit scores in 2021, although their respective average store card balances are all significantly higher than the average store card balance of consumers overall. Retail store cards sometimes have lower credit score requirements than traditional credit cards, which could help explain why balances are generally higher than the national average of $1,046 for consumers with these scores.
| Average Retail Card Balance by FICO® Score | |||
|---|---|---|---|
| FICO® Score Range | 2020 | 2021 | Change |
| 300-579 Poor | $1,454 | $1,264 | -13.1% |
| 580-669 Fair | $1,676 | $1,578 | -5.8% |
| 670-739 Good | $1,658 | $1,645 | -0.8% |
| 740-799 Very good | $816 | $839 | +2.8% |
| 800-850 Exceptional | $343 | $352 | +2.6% |
Source: Experian data from Q3 of each year
Average Retail Card Balance Down in Nearly Every State
Nearly all states—and Washington, D.C.—saw average retail balances decline in 2021. More states than not tend to have balances within $100 of the $1,046 national average retail card average level in 2021.
| Average Retail Card Balance by State | |||
|---|---|---|---|
| State | 2020 | 2021 | Change |
| Alabama | $1,227 | $1,179 | -3.9% |
| Alaska | $1,044 | $1,040 | -0.4% |
| Arizona | $1,037 | $996 | -3.9% |
| Arkansas | $1,247 | $1,188 | -4.7% |
| California | $927 | $913 | -1.5% |
| Colorado | $966 | $947 | -2% |
| Connecticut | $1,013 | $1,014 | 0.1% |
| Delaware | $1,092 | $1,067 | -2.3% |
| District of Columbia | $899 | $861 | -4.2% |
| Florida | $1,222 | $1,192 | -2.5% |
| Georgia | $1,291 | $1,250 | -3.2% |
| Hawaii | $749 | $728 | -2.8% |
| Idaho | $903 | $842 | -6.7% |
| Illinois | $1,018 | $1,002 | -1.6% |
| Indiana | $1,051 | $1,015 | -3.4% |
| Iowa | $852 | $833 | -2.3% |
| Kansas | $1,051 | $1,038 | -1.2% |
| Kentucky | $1,062 | $1,022 | -3.8% |
| Louisiana | $1,286 | $1,278 | -0.7% |
| Maine | $894 | $881 | -1.4% |
| Maryland | $1,124 | $1,098 | -2.3% |
| Massachusetts | $899 | $886 | -1.4% |
| Michigan | $948 | $933 | -1.6% |
| Minnesota | $803 | $784 | -2.5% |
| Mississippi | $1,283 | $1,242 | -3.2% |
| Missouri | $1,064 | $1,033 | -2.9% |
| Montana | $803 | $789 | -1.8% |
| Nebraska | $1,082 | $1,078 | -0.4% |
| Nevada | $1,082 | $1,052 | -2.7% |
| New Hampshire | $970 | $936 | -3.5% |
| New Jersey | $1,051 | $1,057 | 0.6% |
| New Mexico | $1,127 | $1,091 | -3.2% |
| New York | $1,016 | $1,020 | 0.3% |
| North Carolina | $1,183 | $1,136 | -4% |
| North Dakota | $883 | $850 | -3.8% |
| Ohio | $1,065 | $1,033 | -3% |
| Oklahoma | $1,167 | $1,130 | -3.2% |
| Oregon | $819 | $795 | -2.9% |
| Pennsylvania | $1,007 | $985 | -2.1% |
| Rhode Island | $1,081 | $1,040 | -3.8% |
| South Carolina | $1,219 | $1,159 | -4.9% |
| South Dakota | $828 | $798 | -3.6% |
| Tennessee | $1,196 | $1,134 | -5.2% |
| Texas | $1,390 | $1,371 | -1.4% |
| Utah | $925 | $900 | -2.6% |
| Vermont | $782 | $734 | -6.2% |
| Virginia | $1,132 | $1,105 | -2.3% |
| Washington | $883 | $868 | -1.7% |
| West Virginia | $1,214 | $1,172 | -3.4% |
| Wisconsin | $762 | $737 | -3.3% |
| Wyoming | $1,028 | $971 | -5.5% |
Source: Experian data from Q3 of each year
The exception to the decline in balances includes the tri-state area of Connecticut, New Jersey and New York, which were the only three states where average retail balances increased, albeit slightly, in 2021.
| States Where Average Retail Card Balance Increased | |||
|---|---|---|---|
| State | 2020 | 2021 | Change |
| Connecticut | $1,013 | $1,014 | +0.1% |
| New Jersey | $1,051 | $1,057 | +0.6% |
| New York | $1,016 | $1,020 | +0.3% |
Source: Experian data from Q3 of each year
The states with significantly larger-than-average retail card balances tend to be in the South, where big box retailers like Walmart (one of the largest issuers of store credit cards) dominate the retail landscape. Even these states saw balances decline, however, as choppy income streams due to the pandemic changed spending habits for many in 2021.
| States With the Highest Average Retail Store Card Balance | |||
|---|---|---|---|
| State | 2020 | 2021 | Change |
| Texas | $1,390 | $1,371 | -1.4% |
| Louisiana | $1,286 | $1,278 | -0.7% |
| Georgia | $1,291 | $1,250 | -3.2% |
| Mississippi | $1,283 | $1,242 | -3.2% |
| Florida | $1,222 | $1,192 | -2.5% |
| Arkansas | $1,247 | $1,188 | -4.7% |
| Alabama | $1,227 | $1,179 | -3.9% |
| West Virginia | $1,214 | $1,172 | -3.4% |
| South Carolina | $1,219 | $1,159 | -4.9% |
| North Carolina | $1,183 | $1,136 | -4.0% |
| Tennessee | $1,196 | $1,134 | -5.2% |
| Oklahoma | $1,167 | $1,130 | -3.2% |
| Virginia | $1,132 | $1,105 | -2.3% |
Source: Experian data from Q3 of each year
Conversely, more sparsely populated states, with fewer big box and department store retailers, have lower average retail store card balances.
| States With the Lowest Average Retail Store Card Balance | |||
|---|---|---|---|
| State | 2020 | 2021 | Change |
| Hawaii | $749 | $728 | -2.8% |
| Vermont | $782 | $734 | -6.2% |
| Wisconsin | $762 | $737 | -3.3% |
| Minnesota | $803 | $784 | -2.5% |
| Montana | $803 | $789 | -1.8% |
Source: Experian data from Q3 of each year
Familiar Pattern Among the Generations in the Retail Card Market
Like other types of credit such as auto loans, mortgages and credit cards, store card borrowers are more active during and throughout the household formation years, where families grow in size and children routinely outgrow their clothes. So it is no surprise that store card balances increase during these years. Conversely, the very young (Generation Z) and older consumers tend to have smaller expenditures than millennials and Generation X.
| Average Retail Card Balance by Generation | |||
|---|---|---|---|
| Generation | 2020 | 2021 | Change |
| Generation Z (18-24) | $622 | $661 | +6.3% |
| Millennials (25-40) | $1,053 | $1,079 | +2.5% |
| Generation X (41-56) | $1,377 | $1,343 | -2.5% |
| Baby boomers (57-75) | $1,064 | $1,009 | -5.2% |
| Silent generation (76+) | $563 | $538 | -4.4% |
Source: Experian; ages as of 2021
Retail Credit Cards, Past and Future
Retail credit cards have a long, storied history, especially in the U.S. In the 1960s, when Wilma Flintstone and Betty Rubble yelled "Charrrrge it!" before heading to a Bedrock department store, store credit was what they were both excited about.
Over the past decade, the line between retail cards and bank cards has blurred, as some types of retail credit cards can be used outside the primary store as well. For instance, Macy's American Express Card is a co-branded card that can be used not only at Macy's but outside the store for everyday purchases, while the Macy's card can only be used within the store.
Finally, buy now, pay later financing is increasingly making an impact on precisely the types of purchases that store credit cards have been traditionally used for: appliances, furniture and clothes. These payment plans are becoming common at both at the checkout register as well as through online apps, may leave retail cards, if not in the stone age, then as a secondary way of purchasing goods from a consumer's preferred retail outlet.
Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.
FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.
