Around 16 million UK shoppers using store cards are paying 62 per cent more interest than is necessary, it has been claimed.
Research by uSwitch.com found that these consumers are generating a total of up to £892 million extra in interest compared to people paying with
Mike Naylor, personal finance expert at the website, said shoppers were often “lured into” store card deals by discounts offered on the first purchase.
However, this discount will be made completely void by the levels of interest added to outstanding balances, he explained.
“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,” he added.
Mr Naylor said that some store cards can charge anything up to 30 per cent APR, compared to an average of 16.25 per cent APR on a
Credit Action reports that during December last year, there were 250 transactions on plastic cards every second.
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