Store Cards vs. Credit Cards

Store cards, are they a rip off?
The store card market is valued at around £4.8 billion, with some 20 million cards in circulation. Yet whereas the APRs on most leading credit cards have tumbled over the past five years, the APRs of store cards have generally persisted in clinging to the higher ground; many are in excess of 26%, several over 30%. Use these tips before signing up for a store card:

• An initial discount may be a good deal - but it will depend on how quickly you pay off the balance.
• Be APR (annual percentage rate) wise - just how much will you pay on an un-cleared balance?
• Is there is an interest-free period? When does it end and what will the interest rate be afterwards?
• Check all details of the agreement - APR, interest free period, penalties for default and late payment - and don't be afraid to ask questions.
• Remember to consider carefully the costs and benefits of any Payment Protection Insurance (PPI) offered. It is optional and will cost you money.
• Compare with other ways to pay. Using a Credit Cards is possibly much cheaper, you'll still pay interest if you don't pay off the balance each month, but in some cases the interest is up to 50% cheaper than a store card!
• A store card can be a serious credit commitment for which you may need to budget.
• Beware of pushy sales staff and don't be lured into taking out a store card you don't want.
• There is no need to sign on the spot - if in doubt, take the agreement away, read it and seek advice on it before you sign.
• If you get into payment difficulties, don't panic! Talk to the lender as soon as possible.

Store	Provider	Rate
Selfridges	Creation	27.60% APR
Next	GE Capital	24.99% APR
Top Shop	GE Capital	29.90% APR

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