Money News
13th August 2008
Storecard warning for consumers
Paying for goods with storecards is considerably more expensive than taking out a low-rate personal loan, it has been claimed.
New research conducted by Alliance & Leicester found that the average interest rate on a storecard stands at 26 per cent - making them one of the most expensive ways to borrow money.
However, according to the price comparison site, by taking out a personal loan to finance their outlay, consumers can get their interest repayments by a third.
Samantha Owens, of Moneyfacts, said: "With summer well underway, the temptation to splash out on holidays and summer wardrobes is high.
However it is paramount for customers to understand that store cards do not offer attractive rates of interest and are, in fact, some of the highest rates around.
"Personal loan rates can be much lower than store cards and with the regular fixed repayments, the loan is split into more manageable chunks, which is easier for borrowers to pay back."
Around 24 per cent of the population own a storecard.
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