Store cards are 'a real form of debt'

Thursday, February 25th 2010

Shoppers who make their purchases on store cards should be warned that doing so means they could accumulate large debts.

This is the warning of the insolvency trade body R3, which carried out research on the issue.

Some 66 per cent of insolvency practitioners were found to have dealt with consumers who had run-up large debts on store cards because they did not understand the terms and conditions involved.

The problem is exacerbated by people not believing that such purchases count as spending 'real money'.

Spokesperson for The Consumer Credit Counselling Service Tom Howard said: "Store cards are a very real form of debt and when mismanaged, can get you into as much as, if not more trouble as credit from high street lenders."

He advised being aware of the small print and fully understanding the charges of such cards.

Mr Howard added that customers can often feel pressured to sign up to the cards when standing at shop tills - particularly as they often offer discounts for enrolling.