Dive Brief:

• Three quarters (74%) of Americans have had a store credit card — and nearly half (47%) of them regret it, according to research from CompareCards.com by LendingTree. The study looked into the store cards of 50 major U.S. retail chains. 
• Most of the cards in the study had sign-up enticements, but their average annual percentage rate (APR) was a steep 24.97%, and their fine print contained other conditions less consumer friendly than non-store credit cards, according to the report. A full 88% of special financing terms (a big draw especially for younger consumers) included deferred high interest.
• The holidays have some opportunity for retailers to add more store card holders: While half of Americans say they're "highly unlikely" to apply for a store card this holiday season, 24% said they're at least somewhat likely to, according to the report.

Dive Insight:

Store credit cards can be lucrative for retailers in three basic ways: they corral customers into a stickier base, they provide data about those loyal customers' purchases and responses to marketing, and they're a stream of revenue in their own right. 

The last is thanks in part to the steep interest rates and other terms of most such cards. Two-thirds of Americans are aware that retailer cards have higher-than-average APRs (only 6% didn't believe that), but the one-time enticements, promise of rewards and, possibly, the quick decision that is often made at the checkout counter may lead them to sign up anyway.

"People often don't make great financial decisions when under pressure, and that's certainly the case with store credit cards," Matt Schulz, chief industry analyst at CompareCards, said in a statement. "Many of the people who said they regretted getting a store card undoubtedly made a quick decision to get a card, under pressure, without knowing exactly what they were getting into. That's a recipe for trouble."

Most (56 of the 68 cards studied or 82%) came with a perk for signing up, usually a discount on the first purchase, according to the study. But the cards don't work well as revolving credit in light of their high rates. And deferred payments, another common draw, can be brutal financially if the customer can't pay up in time.

The rewards can be nice for people who can pay off their entire bill each month, according to the report. But even Americans with higher incomes regret agreeing to such cards: 88% of individuals in households with income in excess of $100,000 have had a store card, but more than half (58%) say they regretted it. Meanwhile, 85% of households making $75,000 to $99,900 have had a store card and 50% regretted it; 78% of households with income from $50,000 to $74,900 have had a card and 39% regretted it; 73% of consumers who make $25,000 to $50,000 per year have cards and 44% regret it; and 53% of those making less than $25,000 have cards and 43% regret it.

There's some evidence that younger generations are less keen on the terms of such cards, though that could change as they get older and need more credit. It is problematic for retailers that customers who signed up for a credit card that is ostensibly supposed to build loyalty later regret the decision. Several major retailers that offer store cards have changed their loyalty programs to provide non-cardholders with meaningful rewards, including Macy's Star Rewards, Nordstrom's new Nordy Club and Target's "Target Red."