Store cards an 'expensive way to borrow'
Published On 24 February 2008
Store cards can end up being one of the most expensive forms of credit cards if the borrower is not disciplined about repaying the balance.That's according to James Falla, managing director of debt service Thomas Charles, who said that the interest rates applied to such cards tends to be "very, very high".
"Store cards are probably the most expensive form of credit that anyone can consider," he said. "The average store card is 29 per cent APR."
According to recent research from uSwitch, the average amount owed on the 13 million store cards nationwide is somewhere in the region of £2.1 billion.
Mr Falla said that many people agree to such borrowing in a shop when asked by a salesperson if they want to save ten per cent off their purchases by taking out a store card.
"Of course you do - who would not want to save ten per cent?" he said. "But in order to get that ten per cent off, you need to take out a store card."
To really save money, however, Mr Falla said that consumers should be disciplined and "think very, very carefully" about how and when they will repay the balance.
