Credit and debt news
Store card users 'less likely to be in debt than credit card holders'
22 August, 2007
People are "less likely" to run up debts on a store card than on a normal credit card, Competition Commission has said
Because of lower limits on store cards compared to credit cards, consumers are less likely to drawn into debt, spokesperson Rory Taylor said.
While people can borrow "a significant amount of money", store cards need to put in context with other forms of credit, he argued.
On the benefits of store cards, Mr Taylor noted that consumers could effectively utilise a discount offer at the point of sale, before paying of the bill without interest when it arrives.
Compared to credit cards, which can offer limits of up to £10,000, "it wouldn't necessarily be fair to point the finger at store cards as being any worse", he added.
Research by the company at the end of 2004 found that a value of £2,500 million was being held across the outstanding balances of 14 million active store cards.
© Adfero Ltd
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