Store cards charge up to 31 per cent APR claims new research

UK shoppers are being warned against using expensive store cards as figures show worst offenders charge as much as 31 per cent APR, compared with 17 per cent on credit cards.

The research by consumer group Which? criticized both the “unnecessarily high” rates of interest and the easy access to store cards.

Its study suggested an indebted graduate was able to secure almost £3,000 of debt from half a dozen stores, despite earnings of less than £1,000 this year.

Store cards usually offer lower credit limits than traditional credit cards, but come with very high interest rates. And, unlike credit cards, which are given out by banks and their staff, they are handed out by retail staff in high street stores.

There are almost 15 million store cards in circulation, with around £3 billion worth of transactions made on them, according to the Finance and Leasing Association.

It called for tighter checks on customers, saying retailers should share relevant details and work more closely with credit-reference agencies to ensure they know their customer before they agree to lend to them.

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