Credit and debt news
Store cards 'most expensive form of debt'
27 February, 2008
Store cards should be avoided as they are "probably the most expensive form of credit" available, one expert has warned.
James Falla, managing director of debt counselling service Thomas Charles, explained that store cards tended to charge a much higher level of interest than other forms of credit.
He said: "The average store card is 29 per cent APR. It's very, very high, and you get sucked in to those things because the classic sales technique is: 'Do you want ten per cent off your purchase today?'"
Falla added that it is fine for people to obtain a store card for the discount as long as they cut it up afterwards.
Anyone who spent on the card and did not pay the balance off the credit card in full every month will then be left with one of the most expensive forms of borrowing around.
Research conducted by uSwitch found that the average store card APR is 26 per cent - ten per cent high than the average credit card APR.
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