Credit Card News OFT Finds Under 25s 'over Reliant' On Store Cards 18191873

OFT finds under-25s ‘over reliant’ on store cards

26 June 2007
Under-25s are more likely than their older counterparts to borrow using store cards, perhaps unaware that these cards often do not offer the most competitive rates, the Office of Fair Trading (OFT) and Trading Standards Institute (TSI) have warned.

Store card borrowing accounts for just 2.3 per cent of the average debt of an 18 to 24-year-old, while credit card borrowing accounts for 28.5 per cent of their borrowing, according to data from the Consumer Credit Counselling Service.

The study warned that many young people get into debt thoughtlessly without realising its long term implications, with average debt among this age group at £12,790.

“When buying on credit you should try to shop around for the best rate, check on repayments and if you get into difficulty get advice as soon as possible,” advised Ron Gainsford, chief executive of the Trading Standards Institute.

Meanwhile, Nationwide warned that existing ‘order of repayment’ arrangements from many credit card providers mean that the smallest or cheapest debt is paid off first instead of the largest and most expensive, which would save customers more money.

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Written by Editorial Team