Store cards "the most expensive form of credit"

www.moneynews.co.uk > Credit cards > Store cards "the most expensive form of credit"

Store cards "the most expensive form of credit"

Fri 22nd Feb 2008

A spokesperson for debt consultancy firm Thomas Charles has warned consumers against taking out a store card, saying that they are "probably the most expensive form of credit that anyone can consider".

James Falla, the company's managing director, advised people not to sign up to a store card "full stop".

If consumers do take one out, he tells them to "think very, very carefully" about how they are going to pay off the balance.

With the average store card APR standing at 26 per cent, ten per cent higher than the average credit card, those using the cards could be left with a hefty bill if they are not able to pay their balance at the end of the month.

According to a recent study by price comparison site uSwitch, the total amount of credit outstanding on store cards has reached £2.17 billion, while the number of people using store cards has almost doubled in the last five years, from seven million to 13.4 million.

Mr Falla suggested that the impact of the credit crunch and resultant tighter lending criteria has not yet been felt by the store card market in the same way that the credit cards market has.

New legislation came into force in May which requires store cards charging more than 25 per cent APR to carry "wealth warnings" informing consumers that cheaper deals may be available.

Related News : Credit cards
	Brits spent less in the run-up to Christmas 2011
	Credit card spending fell in 2011
	Credit cards 'can be a useful budgeting tool'
	Credit card usage 'to rise this month'
	New measures to help Brits with finances
	Credit card spending 'less prolific in the last 12 months'
	AA Launches new reward credit card
	Borrowings 'still need to be repaid' during a gap year
	Clear information in credit agreements called for
	Brits 'focusing on zero per cent cards'