Lowe’s has increased their credit card APR to 31.99%.
A reader (thank you, David!) tipped me off in late-February that Lowe’s was about to increase their credit card interest rate, but I wasn’t able to confirm it.
I checked again today, and the new rate is now listed on their website.
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For new cardmembers:
As of 3/7/24, Purchase APR is 31.99% and Penalty APR is 36.99%.
I checked the interest rates for Lowe’s competitors, and was a bit surprised to find that Home Depot and Harbor Freight aren’t far behind.
At the time of this posting, Home Depot and Harbor Freight’s consumer credit cards both have an APR of 29.99%.
Lowe’s front-end associates often complain on social media about being pushed to offer credit card applications.
For example, in a Reddit post titled “Seriously, why are we required to push credit applications?”, and associate wrote:
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I was covering a cashier that called out and got pulled aside and talked to by management because I didn’t ask an elderly couple purchasing $20 worth of cleaning supplies if they wanted to apply for a credit card.
With many Americans carrying a monthly credit card balance, and Lowe’s now charging an interest rate of nearly 32%, it seems pretty clear why Lowe’s cashiers are pushed to offer credit card apps at checkout.
jon
Does Lowes actually have any control over this? Lowes and Harbor Freight cards look to be issued by Synchrony, where as the Home Depot card is through Citi.
It was my understanding that the merchant gets a kickback from the issuer for each sign up, a rebate of the card fees if used at that merchant, and a revenue share of the interest/card fees from the branded cards. I don’t know that the merchant has any control of the terms of the cards – rewards, fees, or interest rates.
Stuart
Retailers have the choice of bank they partner with. I’m sure they have some say over the terms.
Mike McFalls
Retailers have partner agreements which cover all the terms of the relationship including: minimum and maximum apr’s, fees, disputes, liabilities, credit terms to customer and even how the companies will split the loses associated with defaults.
As there is no ‘national’ law governing the maximum allowable apr offered, instead it is all determined by a banks ‘home state’ (where they are incorporated) usury laws (which vary greatly state to state). For instance a lot of companies take advantage of Delaware’s pro corporate stature lenient tax policies, reduced restrictions and simplified corporate laws. Another key benefit of incorporation in Delaware is its unique chancery court.
But of course, it’s not that simple as some states permit higher rate, based on contract law, as opposed to usury law, e.g. in California a product offered by a bank is exempted from the states usury law.
Synchrony, Lowe’s partner, is based in Utah where the State law has “no maximum interest rate for loans agreed to in writing” making it very friendly for financial services businesses. Additionally, Utah does not have an “unconscionability” provision with rates solely determined by the ‘market’.
At the National level- the CFPB protects consumer from practices they deem abusive and unfair and there are a number of regulations that banks have to comply with including REG Z and UDAAAP (of primary concern here) as they cover disclosures to customers (apr ranges, approved apr rates and how changes to rates are disclosed) unfair practices and abuses.
Keep in mind that the way that retailers (in this case Lowe’s) pay for the benefits offered as part of their card, is through the fees that they receive as part of the partner agreement. Therefore, if Lowe’s is not making enough money from the partner agreement, and/or the bank is not making enough money from the partner agreement to coverthese perks- one of the steps they can take is to increase the APR offered. It is definitely not that straightforward, though as the federal interest rate plays a role in how much it cost banks to borrow money, particularly where the bank behind the card does not have consumer deposits to lend against. It instances there are no customer deposits the bank has to borrow money as well and they are paying a prevailing interest rate.
That said, this is likely the result of a combination of factors including higher credit cost to the bank and reduced revenue as a result of: in-store credit card usage declines, customer defaults, higher than expected cost for the perks and corporate greed.
David (it was me lol)
It’s Lowes. Synchrony only does what Lowe’s wants per their agreement.
kent_skinner
Those are pawn shop rates.
eddie sky
Loan sharks.
Rosa Rivera
We paid off the credit card and will not use it again.
duke5572
They’re all jacking up rates and cutting benefits. Home Depot recently ended their 11% Rebate match program that worked whenever Menards was running the promotion (often). The ProXtra rewards keep getting worse and worse, requiring more spending for less reward. They rarely offer the bulk discounts I used to get when buying large batches of appliances.
I spend ~half million a year at box stores. HD is actively driving away contractors like me. I guess there’s more money in catering to credit-hungry casual buyers.
TomD
I wonder how much that has to do with rising prices and how much with Menards going to continually 11% – I remember a few years ago it was off and on, now it’s never off.
Daniel Lawson
Might be time to cut up my cards. No reason for the hike but greed. Things are expensive enough and now you make it worse might be time to pay em off and cancel.
Brian Thompson
That is exactly what I did !!!!
I cut up the Synchrony cards and returned them with a letter explaining why.
Quite frankly these interest charges are outrageous .
Customers need to take a stand and send a clear message that they are simply unacceptable.
MoogleMan3
I did just that when home depot jacked the rate up to 30%.
BigTimeTommy
Please do. It is just greed and the only response is to stop giving them money.
Peter
One might call it greed but their goal as a company like for almost any for profit company is to maximize profits for the company and stockholders.
Stuart
Selfishness is the difference between profit-seeking and greed.
eddie sky
I was about to when I needed some new Windows. Guess what, 24 months finance, 0% interest. But oh, miss a payment…
Stuart
0% intro APR offers can be helpful, but NEVER EVER miss a payment.
John
Color me shocked. Store cards aren’t a good deal?
DAVID PERKINS
They never were. They only have value if there is no annual fee, a high discount at POS for using the card, and then paying the card off before interest is accrued.
Robert
Usury.
Ray
Tony Soprano rates are better.
Neighbor Joe
Those credit cards are good only to buy trash bags or light bulbs a customer can pay off with their next statement. I stopped using my HD card a few years ago.
Frank D
I hate the daily sign-up for the credit card pushes, at any box store.
I got rid of the Home Depot card, when they removed the 5% cash back bonus, followed by getting rid of the 5% Lowes match. Lowes still has 5% cash back, so I keep the card and shop there, whenever possible / convenient.
Many box store cards have moved to Synchrony, so they must be giving the various stores better terms and kickbacks?
Get the card with the perks, but pay it off every month, unless it is 0% for a while.
Chris I
Synchrony is a parasitic institution at this point. Insanely high risk tolerance apparently. Consumer credit and dept store cards have outrageously high default rates so most traditional banks now say “uh….yeah, no, def not.”
KeithinKC
I use the Home Depot card only for the frequent 10% off coupons. Immediately pay it off and handle returns as store credit. That’s the only way it makes sense to use, at least for me. I’m not buying too much bulk these days. Haven’t done a full remodel or bought properties to renovate since before COVID, though.
Dave
Zero reason to use a HD card besides the 6-12 month zero percent financing if needed for large purchases. Otherwise they don’t give any kickback for using so no point to. Menards has 2% back for using theirs, which I will instead of debit, to get free money.
atavistic
You’ll recall some Big Box stores have the policy of allowing a segment of the population to steal whatever they want without consequence. That’s got to be paid for somehow.
Mike
I have a Lowe’s card, but I never use it. I got it when they were promoting either 12 months no interest or $1000 off a John Deere garden tractor many years ago. I got the card, took the $1K off and paid the balance before the statement arrived. This is the only reason to get a store card; I did the same at Home Depot to get extra off an appliance (washer or dryer, don’t remember). Otherwise, these cards just sit in a drawer. I use my Amazon Rewards Chase credit card for everything, and I always pay off the balance each month. I do also have a Best Buy card that I use for purchases there, and since it’s a Citi card, I can use it for early access to concert tickets LOL.
xu lu
Appalling. There is no excuse or justification for this. It is caused by loose underwriting standards in which they, in the absence of reasonable statuatory interest rate caps, simply pass their cost of their failure onto the public at large. Utter disgrace. These are predatory lenders not much different than buy here pay here, pay day loans and inching ever closer to loan sharks.
Hepdog
I only use my Lowes or Home Depot Card for a larger purchase with interest free payments for XX months.
All small purchases are made with a cashback rewards card
But, I am a consumer and not a contractor.
I can see where this approaches usury, especially for the small contractor who is floating a materials purchase until he is paid by his customer.
Jim Felt
I wrote a long winded “credit card” response and deleted it.
A first here for me.
Just use any card for your personal &/or business cash management, rewards and possible returns benefit. Always accounting for issuer fees.
Nothing else is in the cardholder’s interest. Nothing.
Mike+I
The only reason to use a store credit card is if it offers a significant discount on EVERY purchase AND you plan to pay it off immediately.
Lowes has definitely gone down hill. Their revised military discount is a big drop from the original. They used to be my preferred big box store, these days HD usually gets my business.
Pat R
you know the biggest red flag for me? Lowes switched to single ply half width TP in the restrooms. What level of cost reduction do you have to embrace for that to be a serious consideration?!?
JimM
Egregiously high credit card rates and exemptions from usury laws are further evidence that this country has the best politicians money can buy.
That said, no one is forcing us to use their card or any other one.
RC Ward
The whole world is run by crooks and we are going to pay the price.
JR Ramos
I remember back in 1991 or so when the home stores (Payless Cashways and Builder’s Square around here…hadn’t seen the current Big Two arrive yet) started doing store cards. They were pushing the sales people and cashiers hard to get customers to commit back then, too, and they had their internal perk programs for the employees. Rates were lower but still atrocious for the time.
I think these cards to serve some purpose, and using banks like Synchrony opens up the use to more people who might not otherwise have usable credit. In an emergency they can help someone – either to get it done and pay it off, or while they wait on insurance to pay. They’re also an accessible way for people to build credit if they don’t yet have or can’t get a major bank card. But for the most part, yeah, usury rates and all the stuff that comes with it. I’ve avoided store cards since the first two I had and won’t ever sign up for one again.
Don
And that’s why my balance is zero!
Munklepunk
I’ve gotten into arguments with people who think everyone needs credit cards to build credit. I haven’t had credit cards in almost a decade and my credit is awesome.
Stuart
Were the arguments over whether one generally needs a credit card to help build credit history, or were they insisting that you need a credit card?
TomD
The one I’ve encountered is that you have to not only have a credit card BUT ALSO carry a balance. Insanity.
You just need something that reports to the credit burros.
S
I don’t really pay attention to the rates. I’ve got a harbor freight, Menards, and home depot card.
All 3 offer 6mo 0% financing on any purchase over $300. if I make a purchase that large, I use the card. Not because I can’t afford it, but because I can use the money for better uses elsewhere for 5 months, with zero consequences.
I can’t speak on lowes benefit plans, as I don’t shop there
Kiki
It’s ridiculous! I will be paying my Lowes card off and not using it again but for a few flowers/plants in the Spring and paying the bill immediately so as to keep for credit purposes (I won’t close it because that’s a worse “ding” to the credit score \_(“)_/