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Schumer Warns Consumers about High Store Credit Card Rates

US Senator Charles Schumer
US Senator Charles Schumer

By Mark Scott

Buffalo, NY – As the holiday shopping season continues, US Senator Charles Schumer is warning consumers to beware of higher interest rates stores charge on their own credit cards.

Schumer appeared at a news conference at the Walden Galleria Thursday, echoing the first line of a popular holiday classic, "You'd Better Watch Out." Schumer said some some store cards have rates as high as 24 percent, compared to the average rate of just under 13 percent for bank cards.

"Be very careful because they try to come in and say that if you use one of our store credit cards, we'll give you a ten percent discount," Schumer explained. "But the amount you get off in December will double (in the interest you'll pay) over the winter, spring and summer."

Schumer was joined by a self-described frequent visitor to shopping malls, Erin Herlihy of Buffalo.

"I have experienced what Senator Schumer talked about," Herlihy said. "It is very disconcerting, and you do have to read the fine print. You do have to be aware of what you're getting yourself into beforehand, but things do happen."

Herlihy said she's taken advantage of the discount she's received for signing up for a card only to learn later that she's paying more in interest.

Schumer says federal regulators should require retailers to prominently disclose their higher rates to shoppers. He also says retailers need to stop marketing their cards to college students who have not yet established their credit ratings.