Store cards ‘may worsen debt’
Article Category: Debt Management Help and Advice
Store cards may contribute to debt problems, one price comparison website has claimed.
MoneyExpert.com has warned consumers of the dangers of taking out store cards, which typically have high annual percentage rates (APR).
Chief executive of the website Sean Gardner said that the average APR charged by a store card is 24.2 per cent - 7.74 per cent higher than the average credit card.
"Avoid the gimmicks, don’t be lured in. Invariably people forget about spending on their plastic, or they use credit precisely because they know they won’t be able to repay the debt immediately," said Mr Gardner.
He advised that a standard credit card with a long zero per cent deal on purchases would be a better choice for customers looking to use credit over the Christmas period.
However, people who are determined to take out a store card should ensure that they choose one with the lowest possible APR and the strongest incentives.
Director of Credit Action Chris Tapp has predicted that more people will avoid credit this Christmas as it becomes harder and more expensive to get.
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