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"Customers with credit on store cards to be penalised"

By admin | October 26th, 2009 | General

It has been revealed that consumers who have credit on store cards are going to be financially penalised, with providers charging those that are in credit with their accounts.

Whilst consumers expect to be charged interest for having a negative balance on their store cards many will be shocked to learn that they will not be charged for having a positive balance on the card.

Those that will be affected are people that have store cards run by the Spanish bank Santander, which also owns Abbey.

Amongst the retailers that have Santander store cards are Mothercare, Debenhams, Topshop, Dorothy Perkins, and House of Fraser amongst others. The charges will work by applying a fee of ten pounds onto the cards of customers that are in credit for more than three months with their store cards.

Previously the only customers that were penalised with those that had outstanding balances on their store cards, and were made to pay punishingly high interest rates of around 30 percent.

However, many shoppers build up credit on their store cards by taking items back and having refunds put on the card, and if they do not spend this credit within three months they will be charged.

One industry official said that consumers need to be mindful of this new measure, and those that have store cards may want to consider switching to a credit card instead to avoid these fees.

He said: “If you have debts on a store card, transfer them to a 0% credit card instead.”

In the meantime Santander officials have said that they will always write to the consumer first before applying any sort of penalty so that customers know the situation.

Tags: debenhams store card, house of fraser store card, mothercare store card, santander, store card charges, store cards

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