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16/06/2008
Store Cards Are 'The Devil In Disguise'
A finance website has found that "store cards are the devil in disguise".
According to Ed Bowsher of Fool.co.uk, they "initially offer attractive benefits and bonuses which can be hard to resist" but "there is a downside to grabbing these discounts and rates".
Noting that, in March 2006, the Competition Commission found that cardholders were being ripped-off by at least £55 million a year, due to high interest rates, insurance premiums and other charges he said that from May last year, the Commission had therefore imposed new regulations on store card issuers regarding their promotion and advertising.
For example, statements must include rate warnings and a summary box or 'honesty box' listing interest rates and penalty charges.
The Commission, however, did not ask that store cards cut their interest rates.
Four card issuers have increased their rates since May 2007, Argos (up 2%), Debenhams (up 1%), IKEA Home (up 7%) and Marks & Spencer Money (up 4%).
However, five retail groups have reduced their store-card APRs, House of Fraser (down 9.4%), Jaeger (down 2.1%), Laura Ashley (down 10%), Oasis (down 5%) and Russell & Bromley, (down 6%).
But, the recent figures from Fool.co.uk found that, on average, store cards charge roughly 50% more interest than credit cards.
According to Credit Action, total UK personal debt at the end of April 2008 stood at £1,426 billion.
Total consumer credit lending to individuals at the end of the same period stood at £230 billion - a shocking figure which has increased 8.7% in the last 12 months.
The average owed by every UK adult is £30,260 including mortgages.
(DS)
According to Ed Bowsher of Fool.co.uk, they "initially offer attractive benefits and bonuses which can be hard to resist" but "there is a downside to grabbing these discounts and rates".
Noting that, in March 2006, the Competition Commission found that cardholders were being ripped-off by at least £55 million a year, due to high interest rates, insurance premiums and other charges he said that from May last year, the Commission had therefore imposed new regulations on store card issuers regarding their promotion and advertising.
For example, statements must include rate warnings and a summary box or 'honesty box' listing interest rates and penalty charges.
The Commission, however, did not ask that store cards cut their interest rates.
Four card issuers have increased their rates since May 2007, Argos (up 2%), Debenhams (up 1%), IKEA Home (up 7%) and Marks & Spencer Money (up 4%).
However, five retail groups have reduced their store-card APRs, House of Fraser (down 9.4%), Jaeger (down 2.1%), Laura Ashley (down 10%), Oasis (down 5%) and Russell & Bromley, (down 6%).
But, the recent figures from Fool.co.uk found that, on average, store cards charge roughly 50% more interest than credit cards.
According to Credit Action, total UK personal debt at the end of April 2008 stood at £1,426 billion.
Total consumer credit lending to individuals at the end of the same period stood at £230 billion - a shocking figure which has increased 8.7% in the last 12 months.
The average owed by every UK adult is £30,260 including mortgages.
(DS)
Related UK National News Stories
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14 September 2005
Store card providers ‘overcharging’ customers
Consumers are being overcharged by as much as £100 million as a result of the high interest rates on store cards.
Store card providers ‘overcharging’ customers
Consumers are being overcharged by as much as £100 million as a result of the high interest rates on store cards.
20 March 2012
Government Credit Cards Being Abused
An examination of transaction carried on government credit cards has uncovered evidence of unauthorised transactions. The National Audit Office report released today will show that government-issued procurement cards are being abused due to a failure to oversee their spending.
Government Credit Cards Being Abused
An examination of transaction carried on government credit cards has uncovered evidence of unauthorised transactions. The National Audit Office report released today will show that government-issued procurement cards are being abused due to a failure to oversee their spending.
29 July 2004
Consumers smash £1 trillion debt barrier
The credit boom has reached a new high, with British consumers now owing more than £1 trillion on their credit cards, mortgages and loans, it has emerged today. According to the Bank of England, consumers took on £11.23 billion more debt in June – tipping personal debt over the trillion-pound mark for the first time.
Consumers smash £1 trillion debt barrier
The credit boom has reached a new high, with British consumers now owing more than £1 trillion on their credit cards, mortgages and loans, it has emerged today. According to the Bank of England, consumers took on £11.23 billion more debt in June – tipping personal debt over the trillion-pound mark for the first time.
18 March 2004
Competition Commission to examine Store Cards
The Office of Fair Trading has referred the supply of store cards to the Competition Commission following a study of the sector worth over £4.8 billion a year in the UK.
Competition Commission to examine Store Cards
The Office of Fair Trading has referred the supply of store cards to the Competition Commission following a study of the sector worth over £4.8 billion a year in the UK.
01 July 2008
Brits Risk £58m A Month In Extra Charges Using Cards Abroad
Research launched today by Travelex reveals consumers are still relying on credit and debit cards abroad, and last month Brits stumped-up £58m in extra charges at ATMs and in retail outlets abroad. This is the equivalent of sending 20,000 families of four on a week-long holiday to the Med.
Brits Risk £58m A Month In Extra Charges Using Cards Abroad
Research launched today by Travelex reveals consumers are still relying on credit and debit cards abroad, and last month Brits stumped-up £58m in extra charges at ATMs and in retail outlets abroad. This is the equivalent of sending 20,000 families of four on a week-long holiday to the Med.
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