Macy's Credit Card New APR

Qs Laptop

Qs Laptop

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I got an update on my Macy's credit card. I don't think I've used this since Christmas 2022. Anyway, they are raising their APR.

As a business owner, I believe in a free market (generally), but this is ridiculous. I guess when the brick and mortar stores are dying they've got to find alternative income streams.

Macys-APR.jpg
 
I’ve never understood how that can be legal. Why isn’t that considered usury?
 
That does seem awfully high. Back in the early 90's, the standard was around "Prime plus Nine" for CC's which ran about 18% average. But store cards like Macy's were always a couple of points beyond that.

In your case, perhaps this is a rate for inactive accounts, to spur your departure?
 
Aerides said:
That does seem awfully high. Back in the early 90's, the standard was around "Prime plus Nine" for CC's which ran about 18% average. But store cards like Macy's were always a couple of points beyond that.

In your case, perhaps this is a rate for inactive accounts, to spur your departure?
Click to expand...

Could be. I use the card to order online maybe once per year, always pay within 25 days. Last time I looked my credit score was 830.

Maybe they don't want me as a customer.
 
We got the same notice. We do not shop there a lot but then again it is one of the few remaining B&M clothing retailers.

It is on autopay so hopefully we can avoid usury.
 
Montecfo said:
We got the same notice. We do not shop there a lot but then again it is one of the few remaining B&M clothing retailers.
Click to expand...

Yep, they do have some nice name brand clothing lines that I like to pick up when they are on sale. Also, their bedding products are nice (when on sale.)
 
Qs Laptop said:
Could be. I use the card to order online maybe once per year, always pay within 25 days. Last time I looked my credit score was 830.

Maybe they don't want me as a customer.
Click to expand...
If you pay the entire balance they probably don’t want you as customer.
Qs Laptop said:
I don't understand how they can do it. This is in an environment where interest rates are expected to drop.
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Credit card rates are priced to credit ratings, not expected future interest rates. Things like rates are usually regulated at the state level, which is why so many are registered in Utah. There is no federal limit on interest rates, however, just notification requirements, which are being met in this case.

I wouldn’t be surprised to see rising balances and greater late payments in Macy’s portfolio.
 
DW buys from Macys but uses a different card there. No real advantage other than a one-time discount if you use your brand-new card IIRC. Of course, they could charge 100% and it wouldn't matter to us as we always pay before the interest is applied.

34.5% DOES seem ridiculous in the extreme but YMMV.
 
Jerry1 said:
I’ve never understood how that can be legal. Why isn’t that considered usury?
Click to expand...
There is not any real limit on what rates credit cards can charge. Gory details: https://www.findlaw.com/consumer/credit-banking-finance/usury-laws.html

Federal law doesn't mandate interest rate limits for credit cards. But, credit card companies must follow certain federal rules. One of these rules is the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (Credit CARD Act).

Some states have usury laws. These laws limit the interest a lender may charge on a debt. But, federal court decisions and statutes have virtually exempted credit card companies from this rule. This is because credit card companies can charge customers, regardless of their state, the interest rates allowed by the company's home state.

This means there are no limits on credit card interest rates in practice. So, the best way to protect yourself as a borrower is to stay informed about your federally guaranteed rights to interest rate disclosures and other protections.
Click to expand...
 
On the flip side of these HIGH interest rates on purchases, many retailers, contractors and big-ticket item appliance companies are still offering ZERO % interest for up to a year (sometimes more) on purchases. Even with having the money to pay, I take advantage of these when it makes sense.

We put a much needed new roof on our house last September, and were offered 0% financing for about a year (actually 13 months) for 100% of the purchase price through the roofing company's finance partner, GreenSky, (a company that caters to the construction industry). Our $11,837 promotional balance is now up to a current balance of $13,995 as of the June statement. I'm not sure what the actual interest rate is but as long as I pay the promotional balance in full before October of this year, I do not incur any interest charges. My online savings account, where the money is sitting, paying 4.25% will have earned $510 in interest by the time I pay this off.
I understand that the contractors build some of the cost into their price, but we had shopped around and got a very good price from this reputable roofer who does tons of work in our area.
I guess there must be plenty of folks who have to pay it off with the interest charges over several years.
 
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