Customers are continually being ripped off by their store cards, despite of new rules which were introduced to protect the 11 million shoppers who use them from getting further into unnecessary debt.
Last year the Competition Commission ordered that stores offering cards with interest rates of 25% or more, must tell customers that there may be better deals and include this warning on each monthly statement. Their findings reports that store cardholders were being ripped-off by at least £55 million a year, due to extortionate interest rates, insurance premiums and other charges.
However, store cards seem to be getting away with hiking charges as much as 7%, as they do not have to warn their customers as long as the interest rate remains under 25%.
Ed Bowsher of money website fool.co.uk, says “Store cards are the devil in disguise. They initially offer attractive benefits and bonuses which can be hard to resist but there is a downside to grabbing these discounts and deals.”