Store Card Warnings

Tuesday 1st May 2007

A new ruling coming into place today will ensure that all store cards charging customers rates of interest over 25% APR carry a warning.

Store cards are a type of branded credit card that can be used in a particular store or chain and they have gained a poor reputation in recent years for charging very high rates of interest to customers.

An inquiry last March by the Competition Commission found that store cards were too insulated from competition and that many customers were unaware that spending on store cards was one of the most expensive ways to borrow money.

From today, all store cards charging annual rates of interest above 25% will be forced to display the following message on the front of all statements: “The rate of interest charged on your account may be higher than on other sources of credit available to you. It may be costly for you to leave balances owing on your account after the interest-free period."