Are you ditching your store card?

Over the past few years, store cards have become popular amongst many shoppers, who are enticed into taking these cards when making purchases, as they are often offered an instant discount. Once they have the cards, many consumers continue using them over the course of the year, but those who spread the repayments on their balance face crippling rates of interest that are far higher than competitive credit card rates.

Figures have indicated that a rising number of people are getting wise to the huge rates of interest that they are paying on their store card balance, resulting in a big drop in store card use over the past twelve months. The figures were released by the Finance and Leasing Association and have shown that many forms of consumers spending fell in the twelve months to August this year, but the biggest fall was with store cards.

In the twelve months to August credit card spending fell by 2 percent, second mortgages fell by 10 percent and spreading repayments via credit from retailers fell by 8 percent. Car finance, however, is said to have increased by 1 percent. With many people having to tighten their belts financially many have decided that they cannot afford the high interest rates that store cards are charging, hence the huge drop over the past year.

Whilst there has been a significant drop in store card use, things may start to pick up again over the festive season as cash strapped consumers looking at different forms of finance to fund their Christmas spending. This is the time of year that many retailers push their store cards, which could see the number of cards being take out and used spike over the final quarter of the year.

Comments

Copyright © 2010 Thrifty Cards • Contact Us