Store cards, like those provided by HSBC and GE Consumer Finance, don't offer competitive rates and charge higher interest than they should, says the UK's competition watchdog.
Antitrust regulator the Competition Commission (CC) says that the 14 million store credit cards in circulation in Britain today are costing consumers up to £100 million more than is reasonable, with store card APRs standing at ten to 20 per cent above average due to lack ofcompetition within the industry.
Deputy chairman of the commission, Christopher Clarke, said: "There are features of the store card market that effectively insulate retailers and consumer credit providers from competitive pressures, notably from credit cards and store branded cards."
The CC found that over half of store cardholders are on some form of interest bearing credit when they used their cards, while the rest settled their balances in full without incurring any charges.
At the end of last year there were almost 14 million active store card accounts in the UK with outstanding balances of £2,500 million.
Although the number of store cards in circulation is actually declining, they will be around for some time to come as retailers continue to use them as marketing tools for their products, according to the CC.to read more about [Credit Cards], click here.
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