Credit Card Basics

Will You Shop With A Store Credit Card This Holiday Season?

We have all seen pictures of the infamous last-minute Holiday shoppers making the mad dash for last-minute gifts on Christmas Eve. This is the signal that the holiday shopping season is finally about to come to a close.

Meanwhile, retailers and economists wait for the spending numbers to come in to see if the season lived up to their hopeful economic expectations. One number they will surely be looking at is whether consumers are applying for and using retail-branded credit cards, a.k.a. store credit cards, which often offer shoppers discounts on their first purchases in exchange for opening a new account.

The subject of store credit cards is of interest these days because of how much shopping has shifted online. Let's face it—the convenience of online shopping coupled with free and fast shipping has changed the way we shop. It's not a new phenomenon, but the data suggests it's accelerating.

As you might expect, retailers with big brick and mortar operations are experiencing a variety of challenges related to the growth of e-commerce: In addition to slowing sales, consumers are not opening as many store-branded credit cards, which have been an important revenue source for many retail brands. It makes sense. If you're doing more of your shopping online, it seems less likely that you'll sign up for that store-branded credit card at checkout.

Store Credit Cards By the Numbers

  • According to Experian's State of Retail Credit analysis, the average number of retail credit card accounts per consumer has been trending down since 2007, from 2.98 per consumer to 2.48 in the second quarter of 2017. That's a drop of nearly 17%.
  • In 2008, total eCommerce sales were at $141 billion, according to eMarketer. By 2017, that number had jumped to $452 billion. That's growth of 320%.
  • In 2008, total offline sales were $3.79 trillion, according to eMarketer. By, 2017, that number hit $4.59 billion. That's growth of just 21%.
  • For the people who do have retail store cards, the average debt carried on those cards is $1841, according to Experian.
  • In a November survey of 1000 adults conducted by Experian, consumers said they planned on spending an average of $740 to pay for Holiday gift giving, up slightly from $734 in 2016.
  • Most survey respondents said they would use cash as part of their payment and 89% of consumers said they were not planning on opening a new credit card this holiday season.

The Big Picture on Store Credit Cards

So what's all this data mean? Along with a serious rise in the number of online shoppers over the past decade, we're seeing comparatively slower growth in offline shoppers. We're also seeing fewer applications to store cards, which means there are fewer apps for relatively fewer shoppers (compared with the growth of the eCommerce set).

In the future, it's likely that retailers will find more seamless ways to market store cards to online shoppers, but the decision to apply for and use these cards must be carefully considered by consumers, whether they are shopping online or off. They need to look at any short-term benefits like discounts on your first purchases and compare them to the long-term consequences of opening a new line of credit and potentially racking up debt. You'll want to pay special attention to the interest rates on store cards, which can be higher than the rates on traditional credit cards.

For more information on how store credit cards work, and what to watch out for, read our article on the pros and cons of store cards.


Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer, or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
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