You are here: Home - Credit Cards & Loans -

Store cards heighten shopper’s remorse for UK consumers

0
Written by:
04/10/2006

Shoppers could be falling foul of their finances at the till by signing up for expensive store cards from ill-trained sales assistants. Pauline McCallion reports  
 
Anyone venturing on to the high street in the last few years has probably been approached by an eager shop assistant extolling the virtues of a store card from their particular establishment. And it certainly seems that for many shoppers, the temptation to take out this type of ‘easy’ credit has just been too much to resist.

As a result, the Competition Commission (CC) now estimates that there are more than 11 million store cardholders in the UK, with outstanding balances of well over £2bn.

The CC conducted an investigation into the area and published a final report this week highlighting the high APRs and competition problems associated with such credit cards. It found that APRs were on average 10% to 20 % too high, resulting in consumer detriment of at least £55 million per year.

Christopher Clarke, deputy chairman of the CC, says: “Retailers and store card credit providers are effectively insulated from competitive pressures. The consequence is that store cardholders who take up credit and associated insurance pay too much.”

The CC has come up with a number of remedies which it plans to implement to take effect in 12 months. This will mean providers of cards with an APR of 25% or more will have to put warnings on monthly statements that cheaper credit may be available elsewhere. They will also have provide more informative monthly statements, offer the option to make repayments by direct debit and offer payment protection insurance separately from other elements of store card insurance.

However, the attention from the CC is too little, too late according to some commentators. Price comparison site, uSwitch.com, claims that a big opportunity to overhaul the store card market has been missed.
 

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

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

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.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

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...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Protecting yourself in the sun

UK consumers cannot even escape the growing threat of identity theft while holidaying abroad, especially those visiting Turkey, France, Spain...

Close