Store cards safer to use

01/05/2007

Deals offered by store cards starting from May 1st will be more safer and easier to use.

Store cards are known to be a disaster, they are known to offer low value, normally expensive and are sold incorrectly.

The Competition Commission have introduced new rules, that store card providers must print warnings on invoices if consumers are being hit with high Annual percentage rates (APRs), normally 25 per cent or more.

On statements interest payments and penalty charges must be outlined so it is more visable for the card holder to see any hidden extras.

The uSwitch.com organisation concluded that there were store cards which were charging more than 25 per cent interest, highest charged was 30 per cent, leaving the average interest decrease of 0.3 per cent in the last year.

Nick White, director at uSwitch commented, "Whilst the new rules for store cards that will come into effect tomorrow are a small step in the right direction in terms of improving transparency, it appears the Competition Commission is closing the stable door after the horse has bolted."

He added, "We believe that consumers need to be made aware of high APRs on store cards (up to 30.9 per cent APR) at the time of signing up to these deals so they know exactly what they're getting."

Basically, not every card is costly, the Ikea Home card charging 12.9 per cent, this is less than standard credit cards.

Mr White spoke, "Overall, unless a consumer really has the funds and the discipline to repay their store card in full each month they will undoubtedly be better off with a 0% APR credit card for new purchases."