New store card rules kick in
01 May 2007
Today sees a boost for store card customers in the form of greater clarity as a result of a Competition Commission inquiry.
Providers must now print warnings on statements if they are to exceed APRs of 25 per cent. They must also include summary boxes detailing interest payments and penalty charges, along with what happens if only the minimum monthly repayment is made.
However, Nick White - director of financial services at uSwitch - believes more needs to be done.
He noted: "Whilst the new rules for store cards that will come into effect tomorrow are a small step in the right direction in terms of improving transparency, it appears the Competition Commission is closing the stable door after the horse has bolted.
"We believe that consumers need to be made aware of high APRs on store cards [up to 30.9 per cent APR] at the time of signing up to these deals so they know exactly what they're getting."
Some store cards can offer better face value than many credit cards, with at least one charging as little as 12.9 per cent. It is important though to consider factors such as a cardholder's discipline and ability to make regular monthly repayments.
© Adfero Ltd
