You are here: Home - Credit Cards & Loans -

Store card holders rack up billions in interest

0
Written by:
10/12/2007

The average store card APR is 10% higher than the average credit card, according to uSwitch, and 16 million users pay 62% more in interest than credit card holders.

Research from uSwitch, an independent price comparison site, has revealed that using store cards for Christmas shopping will cost UK consumers £2.8 billion in interest in 2008. This is £892 million more than those using a credit card will incur in interest charges.

There are currently 13.4 million store card accounts in the UK carrying an outstanding balance of £2.17 billion. The average APR on such cards is 26.34%, according to uSwitch. This means holders are paying 62% more in interest the average credit card, which has an APR of 16.25%.

Mike Naylor, personal finance expert at uSwitch, said: “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 financial decision and read the small print before signing up. This could explain why there are almost 16 million of these cards in circulation costing consumers anything up to 30% APR.”

Click here for more information on current best buy credit cards

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
UK customers have 7 million basic bank accounts

Figures from the British Bankers Association show that there are over 7 million ‘basic functionality’ accounts being used by UK...

Close