Retailers increasing efforts to convince customers to open new credit card accounts

Many consumers have been faced with the familiar question more cashiers at major retailers are asking these days, "Would you like to save on this purchase by opening a credit card with us?" According to a report in the Palm Beach Post, some have been wary of taking on more credit card debt in recent years, ever since the start of the national recession. But this has only made retailers make a greater effort to increase the accounts they handle.

Typically, those consumers who have store-branded accounts take on far more credit card debt at the retailer's brick-and-mortar locations and on its website than others, the report said. For example, Target says customers who use this type of account when they shop with the company will spend about 50 percent more over the course of a year than those who don't.

Most stores don't typically offer discounts to those consumers who use their branded accounts to take on credit card debt, the report said. However, they may offer savings of something like 10 percent on any purchase made the day a new account is opened. Sometimes, that temptation can be too much for consumers to ignore.

"It's a battle between retailers and consumers," Kit Yarrow, a consumer psychologist, told the newspaper. "Retailers make more money when consumers spend on their credit cards, so they offer good incentives in a quest to get people to use the store credit cards. It's only natural that consumers be enticed by that, especially at a time when we're more cost-conscious."

Beyond the traditional initial discount, however, many retailers are now offering different incentives, the report said. Some are adding rewards points that will give cardholders a small percentage of their purchase back, which can only be spent in stores. Others are offering everyday discounts.

Many consumers have been avoiding taking on credit card debt in recent months, and have also paid more into their existing balances in an effort to reduce the total amount they owe to lenders.