Store credit cards cause extra Christmas expense

Mon, 10 Dec 2007

Consumer that choose store cards to pay for their Christmas presented could be paying billions extra in extortionate interest payments . A study indicates that the holders of store credit cards will pay £2.8 billion in interest, 62 per cent more than standard credit card holders.

Store cards are a common offering from high street shops, including established brands like TopShop, Argos, B&Q and Selfridges . However, the interest rates on these cards can be massive, with an average of 26 per cent.

Which?, the consumer group, have slammed store cards for their role in over-stretching UK consumers that are already up against the wall. Paul Davies, who urges shoppers to cut their store cards up, reportedly commented: "Sales staff in stores are incentivised to promote store cards and we are concerned that people won’t realise that the rate they have to pay is really very high. A monthly rate of 2.2 per cent may seem manageable, but the annual percentage rate (APR) is actually 29 per cent, which is extortionate."
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