Summary
A vast amount of people use shop cards but are these people conscious of the horrific levels of interest fees? Read this article to find out how store cards work and to get some good advice.

We will begin by telling the truth, we are not great fans of store credit cards. Nevertheless, there are approximately 13 million store card holders with overdue balances of well over 1.5 billion pounds. And some sixtyfive retailers operate shop cards, mostly large DIY retailers, department stores and clothing retailers.

Store cards, are a branded card which may only be used in one particular shop or chain. Traditionally they are the most costly source of credit, charging up to and over 35 per cent interest per year. That is much higher than the conventional high street bank card. Since the normal shop card balance is about 900 pounds, that would that would cost card holders 280 pounds a per annum simply in interest. That cost can quickly spread into an insurmountable debt .

Looking at the positive side of store cards, they they can be handy as the shops generally promote them with discounts off the goods bought on the card and they might also supply a longer interest free period. Clients would also get specific promotions sent to them by letter or be informed of new products before other people.

On the negative side, danger awaits those who are easily tempted by ”nothing to pay for 6 months”, “interest-free” or discounts offers above all those people who may by now be juggling debt . These credit card holders may be using them precisely because they haven’t got the cash to pay the whole price now and they are just praying that they will be able to pay next month. Not a good policy!
High street stores should be worried about overly persistent sales assistants promoting shop credit cards to customers who have hardly any conception of how to manage their use of the credit card. In our view, it’s so easy to convince someone to sign up for a store card, but unless you pay off the whole amount during the interest-free period these cards are a very expensive source of credit .
We accept that the credit cards can be very tempting in order to get a discount on your shopping bill.

Nonetheless, it is ever so easy for debts on your store credit card to climb out of control.
Consequently, as a general rule we suggest that you steer clear of shop cards unless you are totally positive} that you will pay off the total bill as soon as the store card bill arrives.

Debt Specialists are forever pushing the financial regulators to escalate interest rate warnings. They believe that statements for store cards should include a very bold warning exposing their APR interest rate and what the card holder has to pay if just the minimum amount is made.

Subsequently if you do decide to consent to a store card be very sure how much it will cost you. We are sure that many British shoppers find shop cards to be an enticingan attractive way to get big savings on their purchases. But please, let us recap, always promptly pay off the whole balance every month. This is the only way to prevent falling into the debt trap