Avoid store cards, says report
21/12/2006With national spending records set to be smashed over the festive season, consumers have been warned against using costly store cards to fund their last minute Christmas purchases.
A study from Alliance & Leicester reveals that Brits could run up extra costs of as much as £1,500 if they were tempted by the promotional discounts and special offers that come with store cards.
Around a quarter will use such cards this Christmas, with over half taking them up simply because they were offered them at the point of purchase - but such cards typically offer "eye-watering" rates of interest that mean the after-effects of a spending spree could be felt well into the New Year, says the study.
Taking out a secured loan, which are available at much lower APRs, could be a much better option - Alliance & Leicester's research shows that rates on store cards can reach a staggering 30 per cent.
But consumers who have already splashed out on a store card needn't worry, as they could repay all their loans.co.uk/debt-calculator.aspx">debts with a single loans.co.uk/debt-calculator.aspx">debt consolidation loan - simplifying their loan repayments and lowering the rates they pay in the process.
Richard Al-Dabbagh, senior personal loans manager at Alliance & Leicester, commented: "A low cost loan could make borrowing more manageable - or at least make the start of the New Year less of a headache - and it is likely to save you money in the long run."
 © Adfero Ltd
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