Financial website warns of store card “rude shock”

Store card costs could give some consumers a "rude shock" this Christmas, an expert has suggested.

David Kuo at financial website Fool.co.uk said that many providers had upped their rates due to the financial crisis, which could leave many struggling with repayments.

In turn, credit provision among card firms has also been cut back on, due to the decline of inter-bank lending caused by the crunch.

Libor, a key rate showing how willing financial firms are to lend to each other, still stands at unusually high levels.

Moreover, some consumers – feeling the pinch of the credit crunch – are also cutting back on their festive spend.

Recent figures from Birmingham Midshires show that the average household Christmas budget has shrunk from £700 in 2007 to £600 this year.

Mr Kuo said: "It is going to be increasingly difficult to get hold of credit cards and store cards which you could have done a couple of years back.

"Store card companies are [also] putting up their interest rates so if you are thinking about putting things on store cards then you are going to be in for a very rude shock this Christmas. The best thing is to put money aside if you haven''t already done so."