SUMMARY - It can seem like a convenient and rewarding way to shop ( life insurance quotes ) but a store card just may have you adding a few too many extra pounds to your bill in the long run.

Shopping with the times - an introduction to store cards

Author: Michael Challiner

In recent years we have been swept away with the

Credit cards are no longer a luxury item for the rich and famous but an accessory we almost can't live without. Because of the growing amount of people with credit cards, ( insurance ) the market is becoming more and more competitive and people are becoming more confused about what is and isn't a good deal.

To take advantage of this information overload, cards are now ( life insurance quotes ) targeting where the problems start - in store.

Store Cards are increasingly becoming more popular, particularly in department stores, as a convenient way to shop and gain rewards in your favourite or most frequented store. So what's the catch?

Store cards don't pose a problem if you are disciplined enough to pay off the balance within the interest-free period (typically between 35 and 55 days).

But, if you can't pay the outstanding balance each month, the interest ( life insurance quotations ) due on the unpaid debt can soon mount up. And it won't be hard to do with the annual percentage rate (APR) hitting the 30 per cent mark on some store cards.

Store cards are regulated under the Consumer Credit Card Act, which sets out rules for any loan under £25,000. The taskforce is also examining whether a complete overhaul of this is needed.

Impulse Buying

Offered at the point of sale, store cards can be obtained after an application has been filled in and a credit check has cleared, which can literally take as little as 10 minutes. You can start spending on you store card as soon as you've signed the dotted line.

Recent research by the Office of Fair Trading has revealed that many people who take out a store card had no actual intention or want in making a big purchase before they reached the shops. In fact, 42% of people who take sign up for store cards never had any intention of doing so before they were asked at a point of sale and persuaded by the sales person.

It's up to you

Store card rates vary, but according to data provider Moneyfacts some of the worst offenders are Comet's Timecard which currently charges an APR of 29.9% and Debenhams whose store card charges an APR of 28%.

Better value store cards include John Lewis (includes Waitrose) with an APR of 13% and Marks & Spencer at 18.9%.

Most financial experts agree that credit cards with lower APRs are generally a better deal than store cards. But, you may be tempted by some of the benefits of a store card which could include introductory discount on goods - typically around 10% - or extra money off during the sale period.

Keep these points in mind

Before signing up for a store card take some advice from the Office of Fair Trading:

1. An initial discount may be a good deal - but it will depend on how quickly you pay off the balance.

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