Store cards under the microscope again
(17 January 2006)

The true cost of owning a store card has been revealed for all to see, with a survey showing that consumers can rack up 333 per cent more interest on such a service than by using a conventional credit card and that APR levels are distinctly unforgiving.

Research from uSwitch.com suggests that the APRs of some store cards can exceed six times the Bank of England base rate, and double those of other services available on the consumer credit market.

Nick White, the firm's head of personal finance, said that there is little sign of the situation improving immediately.

"Although the Competition Commission has suggested store cards carry a warning if their APR is over 25 per cent, few providers have done anything to address the staggering rates they charge," he noted.

"The investigation by the Competition Commission has highlighted the extortionate APRs being charged and the dubious sales of payment protection insurance."

You might want to find a better means of managing your longer-term credit – but in the meantime it might be prudent to stop piling the debts on any particularly high-interest deals you have while you seek out something more beneficial.

Meanwhile, a payday loan can keep you tided over to ensure that you're not putting more on long-term credit and not having to plough into your savings. Short term cash of between £80 and £1,000 is paid back, with a clearly-published amount of interest, on your next payday – with no obligations lingering thereafter.



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