Citizen’s Advice Bureau cautions against store credit cards

As the Christmas shopping season is upon us, many retailers on the High Street have redoubled their efforts to entice female shoppers to take out store credit cards, which are traditionally marketed towards them.  Lured by money off their initial purchases, and sales staff pitching them hard and fast, many women take out these store credit cards every year.

What the majority of High Street retailers do not disclose very clearly to their customers however is that these store credit cards almost universally carry incredibly high interest rates on purchases.  Some cards can carry as much as 30 per cent in interest. What this means is that even a debt as relatively minor as £500 could take over ten years to repay if the card holder chooses to only pay off the monthly minimum balance since the majority of each monthly payment goes towards paying off the interest.

While these store credit cards are one of the most costly sources of credit, there is no dearth of customers who use them on a regular basis.  In the UK alone there are approximately 12.9 million store credit cards in circulation, which account for about £2.2 billion of spending. According to statistics, single men are outnumbered by a factor of three to one in comparison to single women who currently struggle to repay store credit card debt, and now customer advisory organisations are cautioning women to rethink their plans to take out and spend on a store credit card this Christmas shopping season.

One such organisation, the Citizen’s Advice Bureau, issued a statement in which the way store credit cards are sold was criticised.  A spokesperson for the Bureau stated that shops that target young women at point of purchase means they will be distracted by the discounts on their purchases instead of taking the time to read the terms and conditions of the store card.

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