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Major retailers are hiking their store card APRs over 30%. Here’s how you can avoid high-interest credit debt

Photo illustration of a person using a credit card to pay for groceries.
The average credit card annual percentage rate (APR) has reached its highest level since 1991.
Photo illustration by Fortune; Original photo by Getty Images

Credit cardholders are feeling the squeeze of the Fed’s latest attempt to curb inflation by raising the Federal funds rate. Earlier this month, the Federal Reserve announced the fourth consecutive 75-basis-point increase; this was also the sixth increase this year. 

After this latest increase, Kroger, one of the nation’s biggest grocery store chains raised its store card APR (annual percentage rate). The supermarket chain’s rewards credit card, the Kroger Rewards World Elite Mastercard, which is issued by U.S. Bank, now has an APR range of 17.74% to 30.74%, breaking through the 30% threshold that most major card issuers have not surpassed. 

“The credit card industry has long seen 30% as an unofficial ceiling that issuers wouldn’t crack for fear of scaring off potential applicants. There are some cards that have exceeded that number but not many, and they tend to be aimed at folks with bad or no credit and issued by smaller banks. The big megabanks that dominate the credit card business just haven’t gone there. That’s slowly starting to change,” says Lending Tree chief credit analyst Matt Schulz. 

With one more possible rate hike before 2022 comes to a close, consumers could see other major retailers following suit. Following Kroger’s hike, Bloomingdales, Macy’s, and Shell have all raised their card APRs over that 30% threshold as well. 

Credit card APRs over time  

According to’s annual retail credit cards study, the average APR for a retail credit card hit a record high of 26.72% this year. Retail cards are leading the way in terms of rising APRs, but they could hit a breaking point soon.

“We’ve recently seen some retailers, including Kroger and Wayfair, push past the 30% mark for the first time, and I think others will soon follow,” says Schulz. “I don’t think we’ll see a flood of cards go above 30%, though, because banks just aren’t sure that the market will bear it. What we could see instead is banks choosing to keep the APRs on new credit card offers at 29.99% or lower and instead looking to find revenue elsewhere, including potentially increasing fees.”

Average credit card interest rates across all card types are on the up and up as well.

According to the most recent data from Bankrate, the average credit card annual percentage rate (APR) has reached its highest level since 1991. APRs are now at a record 19.04%, beating the 19% peak of more than 30 years ago—and further increases could still be ahead. 

3 ways to avoid debt and protect your credit score  

As rates continue to rise, there are a few ways you can navigate this changing landscape to protect your finances. 

  1. Prioritize paying down your credit debt. Carrying a balance month to month will cost you, even more so as rates continue to rise. If you tend to carry a balance and only make the minimum payment on your credit card, now is the time to reconfigure your budget and look for ways to eliminate that debt as fast as possible to avoid paying steep interest charges and fees. Plus, paying down debt could boost your credit score, and a higher score could persuade your credit card company to work with you and potentially lower your APR (more on that below). Pro tip: Consider a strategy like the debt avalanche method, which helps you target your high-interest debt first. 
  2. Shop around for the lowest APR. If you’re in the market for a new credit card, don’t settle for the first pre approval that comes your way. Compare cards to determine which one has the lowest APR as well as other attractive introductory perks like a zero-interest period or lucrative rewards structure that could help you trim costs. 
  3. Call your credit card company and ask them to lower your APR. When the economy isn’t doing so hot, lenders may be more flexible and offer consumers temporarily reduced interest rates or even a higher credit limit.  “Even if you’re not in a financial crisis, you can just call and ask for a lower rate,” says Schulz. "There’s no guarantee you’ll get your way, but the success rates are so high that it is clear that it isn’t just folks with 800 credit scores and decades-long track records who are being helped. It’s absolutely worth the ask.” 

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