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Store credit harder on consumers as rates climb

Opening a retail store credit card to secure an alluring one-time deal can drain consumer wallets in the long run, a new report suggests.

The average APR, or annual percentage rate, on credit cards from large American retailers has spiked to 23.23 percent, an increase of more than 2 percent since 2010, according to a CreditCards.com survey. The retail rate sits higher than the national average APR of 15.03 percent, according to the report.

"The effects can be pretty big," said Matt Schulz, analyst at CreditCards.com. "A lot of these offers are made under pressurized situations."

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Private-label retail cards accounted for roughly $270 billion in sales last year, according to the Federal Reserve. To gauge rates within the huge payment system, the study looked at the top 100 retailers in 2013 sales volume as tracked by the National Retail Federation, finding that 36 offered credit card programs. Those companies offered a total of 61 cards within their programs, most of which are store-only or general purpose cards.

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Limits on how often card issuers can change fees and interest rates combined with decreased consumer spending after the recession helped lead to the APR hike, the study said. Many retail stores raised their APR to make up for lost sales, which helped push the retail average higher.

The report noted that store cardholders who keep up with their payments can "find value" in membership rewards, such as discounts or loyalty bonuses. But consumers often will end up paying a lot more on a private-label retail card than the average credit card, Schulz said.

At the average retail credit card rate, a consumer with a $1,000 card balance making minimum payments would take more than six years to pay it off, incurring $840 in interest fees along the way, the study found. That payment period would last 17 months longer and be $444 more expensive than the same balance at the national average rate, according to the report.

Consumers at some stores could find themselves shelling out even higher payments. Zales (28.99 percent), Office Depot (27.99 percent) and Staples (27.99 percent) charge the highest APR rates among companies in the report.

But the rates listed in the survey may not capture the variety of the card programs, retailers said. Staples offers multiple rates and its most popular business credit plan charges a 14.99 percent rate, a Staples spokesman told CNBC.

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The figure used in the study marks the high-end of Zales' rate range, which starts at 23.73 percent and is set by a lending partner, a spokeswoman for the company told CNBC. She added that the company offers some plans—ranging from six to 18 months—that charge no interest.

Office Depot didn't immediately respond to CNBC's request for comment on its rates.

Schulz noted that in finding the rates for each store, researchers looked at registration information online as a consumer would. The Zales rate, he said, was found on a terms and conditions page that surfaced in the sign up process.

He added that the survey should tell consumers to take their time when signing up for a card. When pressured to get a card in an on-the-spot decision, shoppers may commit to a deal they don't have the resources to pay.

—By Jacob Pramuk, Special to CNBC.com

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