Interest warning for shoppers
Taking out a store card can be a short cut to big interest payments, it was suggested today.
Store cards often come with an attractive introductory offer, such as a ten per cent discount on purchases on the day the consumer signs up, and people who pay off their full balance every month can grab themselves a bargain.
However, an analysis of terms and conditions by the building society Nationwide showed that store cards are expensive for anyone who ends up paying interest on outstanding balances, as many come with annual percentage rates that are almost twice those available on credit cards.
Jeremy Wood, divisional director of Nationwide, suggested consumers should look to stretch their budget further by sticking to cheaper forms of borrowing, explaining: "Although store card introductory offers look great at face value, borrowers who are unable to clear their balances each month could find that they are paying over the odds."
Credit Action, the money education charity, recently warned consumers that borrowing on store cards is far more expensive than using loans, overdrafts or credit cards.
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