| Storecard Customers Confused About Credit, Survey Claims
By Rachael Crofts, PA
One in five customers who took out a storecard last Christmas was confused by the terms or did not receive an explanation from staff about the credit deal, it was claimed today.
A survey for comparison website uSwitch.com also found 3% of the consumers felt pressurised or intimidated by shop staff into applying for the cards.
Nick White, Head of Personal Finance at uSwitch.com, said: “Store cards are one of the UK's biggest financial rip-offs and it's a travesty some consumers feel they are being forced into taking them out or feel that they are not receiving a satisfactory explanation as to what the pitfalls are.
“Many sales assistants simply don't understand the complexity of store cards, so it is highly unlikely they would be able to satisfactorily advise customers about them.
“Stores must take some responsibility for educating their staff and consequently their customers, especially when interest rates on these products are so high.
“Sales assistants should, at the very least, know what the terms and conditions stand for and what the implications are when keeping balances on the card.
“By all means, take out a store card to take advantage of introductory offers, but never borrow money on it and be sure to repay the balance in full, as in some cases the APR can be as high as 30%.
“Other add-ons, such as payment protection insurance make the overall cost of a store card even more expensive.”
“We urge people to ditch their store cards as quickly as they can. Those with outstanding balances should pay them off as soon as possible, or transfer the debts to a credit card with a 0% or low introductory rate on balance transfers.
Even after the introductory period has ended, most credit cards will be considerably cheaper than the typical store card.
“The message is simple – there's only one sensible thing to do with store cards. Cut them up and put them in the bin. Short of going to a loan shark, they are quite simply one of the most expensive ways of borrowing money.
“The sooner the sale of store cards is regulated, the better.” « Back to articles |