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"Your gifts could cost twice as much with a store card"

By admin | March 8th, 2008 | General

With many shoppers across the UK clamouring to get last minute gifts for Christmas, and often trying to work out how to finance their purchases, experts are urging consumers to watch out for the perils of store cards and to think carefully before being talked into signing up for one. Retailers push store cards particularly hard at this time of year, with many people looking for ways to fund both the festive season and to pay for purchases in the January sales.

According to some experts consumers that are going to be using store cards to fund Christmas purchases, and intend to spread the repayments, could end up paying twice as much overall for the purchases that they make, making it all in all a very costly seasons. During the January sales it is said that £1 is worth £2 because of the bargains that are around. However, once again those using store card to make these purchases without the intention of repaying in full within the interest free period could end up paying twice as much hence not benefiting from the discounts.

Despite an investigation by the Competition Commission many store cards are still charging interest rates that are teetering on the 30% mark, and this means that any purchases that you make on the cards and do not repay within the interest free period could be bumped up by hefty interest charges.

One industry professional stated: ‘People are typically lured into store card ‘deals’ at the checkout because they will get a small discount on the purchase being made. In most cases this discount will be completely negated by the high levels of interest incurred by those who do not pay the balance off in full every month. More importantly, a busy checkout in a department store is not the best location to allow people to make an informed decision.’

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