will people ever learn

from the u.k this!

Store card shoppers pay more



USING store cards for Christmas shopping will cost consumers £2.8billion in interest in the next year, according to research.

And consumers who use the cards are paying an average of 62 per cent more interest than they would if they used a credit card.

Around 16 million Brits have store cards on which they collectively owe £2.17billion, according to comparison website uSwitch.com.

But the group warned that the average interest rate charged on a store card was 26 per cent, with some charging as much as 30 per cent - nearly double the average credit card rate of 16 per cent.

People are expected to spend an average of £863 this Christmas.

But if they spend this money on a store card, the interest during 2008 will be £179 if they make only the minimum repayments each month.

And the equivalent interest on a credit card would be £123.

Mike Naylor, personal finance expert at uSwitch.com, 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.�

Figures show that the number of store card accounts has almost doubled from 7 million to 13.4 million in the last five years.