10 December 2007
Britons will be left out of pocket by some £2.8 billion over the next year through the use of high-interest store cards over the festive season, new research from uSwitch has shown.
According to the study, the average APR of store cards stands at 26%, compared with the 16% offered by most credit cards.
As a result, the total interest to be paid off after Christmas will total £892 million more than if credit cards alone were used for the UK's festive spend.
This extra interest burden is driven by the massive increase in store card ownership in Britain, which has almost doubled from 7 million to 13.4 million since 2002.
Personal Finance Expert at uSwitch Mike Naylor commented: "People tend to get carried away with Christmas spending; we just hope they seriously look at how much more store cards will cost them and ensure they use the best deals available.
"Ultimately, these cards are generally an extremely expensive form of credit and consumers should consider the long term costs carefully before using them.”
The average UK festive spend per person is set to hit £863 this year - which, if paid for by a store card, will mean an average interest payment of £179 over the next year.
According to uSwitch, the total amount of credit now outstanding on store cards in Britain currently stands at £2.17 billion.
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