Warning over store card interest rates

The benefits of store cards are often outweighed by high interest rates, an expert has noted.

Tom Howard, spokesperson for the Consumer Credit Counselling Service, explained the products can be marketed as a means to obtain a promotional discount, but those who do not pay what they owe in full each month can face debt problems.

Noting that customers need to be aware of the commitment they are making, he suggested that many fail to read the small print when they sign up in a “pressured environment” at the till.

“Store cards are a very real form of debt and, when mismanaged, can get you into as much as, if not more trouble as credit from high street lenders,” said Mr Howard.

The comments came in response to a study by R3, which found that two-thirds of insolvency practitioners have dealt with people who took out store cards without fully understanding what they were agreeing to.

By Andy Mackay