Thursday, November 27, 2008
Category:
Consolidation
Recent news from Moneyexpert has revealed that store card rates have grown by one per cent in the last six months.
The average rate currently stands at 25 per cent, however the comparison site reports that more than half of stores are charging more than 27 per cent. At the highest end of the scale, some are charging over 30 per cent.
According to Moneyexpert, few store cards are able to provide a rate below the current credit card average. Store card offers include being entered into a prize draw, collection previews and also discounts. Some high street stores are offering extended interest free periods in return for customers spending more.
Commenting, Sean Gardner, Director of MoneyExpert.com, said: "Store cards can be a useful way of qualifying for instant discounts but when it comes to borrowing they are a complete rip-off.
"The fear must be that with other forms of credit running dry, desperate consumers will be tempted into expensive deals as a last resort for Christmas.
"As soon as the interest free periods expire, store card users will face huge APRs. Many will plan to pay it off but our research this time last year showed that one in 10 were still clearing Christmas debts incurred 12 months previously. If any of those debts were on store cards the interest alone could have been huge."
..........................................................................................................................
Homeowners who have outstanding balances on several store cards, could also consider consolidating these with a
secured loan. Consolidating debts into one place with a secured loan could result in a lower monthly repayment and reducing monthly outgoings. There are of course, many options to consolidate debt but a secured loan is one available to homeowners. Consolidating debt may increase the amount paid back overall, and could extend the repayment period of the debts.
