"Sneaky" store cards increasing interest

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"Sneaky" store cards increasing interest

Tue 17th Jun 2008

Store card providers are increasing their interest rates despite regulations set down by the Competition Commission, finance website fool.co.uk has found.

The commission introduced new regulations on May 1st 2007 for store cards that charge annual percentage rates (APRs) of 25 per cent or more.

But some "sneaky" stores have stayed just below the 25 per cent threshold and still increased their interest.

Savings expert at fool.co.uk, Ed Bowsher, said store cards were "the devil in disguise".

The three main offenders identified by fool.co.uk are Ikea (up seven per cent to 19.9 per cent), Marks & Spencer (up four per cent to 23.9 per cent) and Debenhams (up one per cent to 19.9 per cent).

Burton, Dorothy Perkins, Miss Selfridge and Warehouse have the "worst" store cards, not having changed since May 2007 and with an "extortionate rate of 29.9 per cent" according to the website.

Mr Bowsher said store cards were "designed to make you spend" and said a zero per cent balance transfer card could mean avoiding paying interest for up to 15 months.

Nearly a quarter of enquiries to Citizens Advice in 2006-07 related to credit and store card debt, according to a report in the Independent.

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