Consumer credit risk should be assessed in “realistic way”

Martyn Saville, senior researcher at Which?, said that the organisation “would expect” companies to only issue store cards to consumers with credit limits that are within their repayment capabilities, following a thorough credit check.

“Which? believes that financial institutions should always lend responsibly and properly assess the consumer’s ability to pay back the credit extended,” Mr Saville said.

He added that if a consumer is only intending to make the minimum repayment on their store card they should “avoid taking out a store card altogether”, as this will mean them avoiding the accumulation of interest and potential debt management problems.

Research released by Alliance and Leicester in June showed that 50 per cent of British consumers that opt for store cards as a method of borrowing do so because of convenience.