Competition Commission’s store cards market investigation

Commenting on the Competition Commission’s store cards market investigation order which came into force today, Robert Kenley, head of credit cards at moneysupermarket.com, said: “For a long time store cards have been the ‘bad boys’ of the credit market with much higher APRs and integrated payment protection insurance. Today they must swing into action to ensure more transparency across their credit offerings. A ‘health warning’ on these cards is long overdue.

“While the measures put in place today aim to make the store card market clearer, this still is not enough. A better action would be to force the card operators to cull their APRs, so that consumers cannot possibly be subjected to such high interest repayments.

“Store card providers have relied on their “point of sale” offering – tempting customers with money off their new purchase. However, people should only take advantage of these offers if they are confident they can pay off their balance in full, so they are not stung with a hefty APR.

"Anyone using credit to fund their shopping spree should consider one of the credit cards offering long 0 per cent offers for purchases, such as the Barclaycard 0 per cent purchase card, or the Sainsbury’s Bank Platinum, both of which offer 0 per cent on purchases for 10 months. But ensure you know when the offer comes to an end or you’ll find yourself back on the standard APR – typically around 16.1 per cent – though this is still less than the typical rate offered on store cards.

"Research from moneysupermarket.com shows people stick with the same card for an average of seven months once the 0 per cent offer period has ended. Almost 30 per cent of them keep the card for another 12 to 18 months, which means they could be paying over the odds.”