Credit Card News Warnings Issued Over Store Cards 15121360
Warnings issued over store cards
23 December 2005
The commission recently launched an inquiry into the store card market after concerns over its transparency were raised.
The report concluded that stores should provide detailed information on statements so that customers were fully aware of the terms and conditions of their cards.
Information which the commission felt should be provided included the annual percentage rate (APR) on any outstanding balances, the level of late payment fees and the warning of only meeting the minimum payments each month.
It was recently found that customers who only paid the minimum amounts on store card and credit card balances each month were actually getting themselves further into debt instead of keeping it at a manageable level.
However, consumer groups said that although they welcomed the commission’s inquiry, more still needed to be done.
A spokesperson for leading consumer watchdog Which? said: “This is a long-term problem requiring long-term solutions.
“The solutions the Competition Commission offers are all helpful, but won’t solve the fundamental problem that shoppers will continue to be sold these cards without adequate information about the rates or charges.
“Information about interest rates should be prominently displayed at the point of sale and in marketing materials as well as on statements.
“Store cards are an unnecessary and extremely expensive way to borrow. Which? would advise people not to use them – there are much cheaper ways to borrow.”
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