Let the shopper beware.
Major retailers across the city are socking their credit-card customers with exorbitant interest rates, a study showed yesterday.
Many store cards carry rates that are dramatically higher than those charged by bank cards, the study said.
The survey of more than 30 stores, conducted by Rep. Anthony Weiner (D-Brooklyn), found that Big Apple retailers continue to charge rates near and above New York’s criminal usury rate of 25 percent.
The average store-card rate was nearly 22 percent.
The current national average rate for bank cards, such as Visa and MasterCard, is 13.69, the study said. And that average doesn’t include the numerous low promotional rates available from many bank-card issuers.
Topping the list were Levitz and Seaman’s furnitures with interest rates of a whopping 26 percent.
But the furniture chains are not subject to New York’s usury law because their card operations are handled by a Nevada bank.
“When you use a store credit card, you’re getting ripped off,” Weiner said.
“At a time of some of the lowest interest rates in decades, store credit cards have defied the laws of economic gravity by continuing to hit consumers with higher and higher financial charges. This is simply out of whack.”
In the wake of the soaring card interest rates, Weiner vowed to introduce legislation that will require stores to post clear and large signs stating its interest rate, grace period and annual fee, right at the register.
Macy’s was third on the list of high-rate lenders, at 24.9 percent, according to the survey.
But a spokesman for the department store said the study is skewed, saying the 24.9 percent applies only to its high-risk buyers – people who are late or slow on payments.
“Our regular interest rate is 21.6 percent, which is standard within the industry,” said the spokesman.
“I didn’t realize the interests rates are that high,” Isabelle Mills, 53, said yesterday as she shopped at Macy’s.
“That’s crazy. It’s not right. They’re taking advantage of us.”
“We’re getting ripped off,” said another shopper, Steven Weinstein, 38. “It’s a scam. Now I’m going to get rid of my store credit cards.”
Levitz and Seaman’s did not return calls for comment.
ABC Carpet, Radio Shack and Best Buy were fourth, fifth and sixth on the list with interest rates of 24, 23.9 and 23.2 percent, respectively.
The survey also singled out Express for a dramatic increase in rates. The clothing chain’s credit-card rate of 22.8 percent has more than doubled since 1995, the survey said.
In the survey, Weiner’s office contacted 36 major Big Apple retailers and obtained information regarding interest rates and grace periods.
Weiner said shoppers could save more than 16 percent this holiday season just by using a bank card instead of store cards.
“Shoppers should leave home without their [store] credit cards,” he said.
“The bottom line is that consumers have to shop around for the best credit-card rate just like they shop for clothing, furniture and electronics equipment. Shoppers should demand reasonable card rates.”
RETAIL OF THE TAPE
Store Credit Card Rates
Highest:
Levitz Furniture 26 %
Seaman’s Furniture 26 %
Macy’s 24.9 %
ABC Carpet 24 %
Radio Shack 23.9 %
Lowest:
Banana Republic 18.5 %
Mandee’s 19 %
Comp USA 19.2 %
Neiman Marcus 19.8 %
Crate & Barrel 19.8 %
Source: Survey by office of Rep. Anthony Weiner (D-Brooklyn)