Store cardholders to get ‘wealth warning’ on statements
Store cardholders will now be told on their monthly statements that they can get a better deal elsewhere when it comes to their shopping.
The warning will be put on store cards that charge an Annual Percentage Rate (APR) of 25% or over – which means that over two-thirds of the cards will carry the warnings.
The decision to impose the warning was made after a Competition Commission enquiry last year found that APRs were too high on the cards.
The Commission found that store card users were overcharged at least £55m a year on the 11 million accounts that exist in the UK.
The Finance and Leasing Association (FLA), the trade body representing store card providers, said that the industry was “ready” for the change. “Lately, some providers have already lowered their rates,” said an FLA spokesperson.
“Providers are getting on and implementing what the Competition Commission wants. No-one has any issues with incorporating this information on the statements.”
Retail analyst Debbie Harrison said: “Let’s face it, these cards charge exceptionally high rates for very little discernible benefit. To treat customers fairly it is worth reminding them that this is the case when their statements drop on to the mat.”