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Store cards heighten shopper’s remorse for UK consumers

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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,, claims that a big opportunity to overhaul the store card market has been missed.

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