Serious debt problems in UK fuelled by store cards

According to a recent survey a good chunk of the serious debt problem faced by consumers in the UK is fuelled by store card debt. Store cards have been available to consumers for a number of years, and these cards are basically like credit cards, but can only be used at selected retailers. The interest that is charged on these stores cards when a balance is carried over can be extortionate, and many people have found themselves falling into spiralling debt as a result of spending on store cards.

According to the results of the Debt Counsellors Annual UK Debt Survey over forty percent of those that have asked for help in dealing with their debt issues owe money on store cards, although the largest contributory factor in debt problems was credit cards, which affected over ninety percent of those looking for assistance or solutions in relation to their debt problems. According to experts the problems fuelled by store cards, on which interest rates are far higher than credit cards, are worse at this time of year, with many people having used these cards to fund some of their spending over Christmas and in the January sales.

According to one counsellor from the Debt Counsellors agency, many people are not exercising caution and care when using their cards, and this is resulting in high levels of store card debt. He stated: "Store cards can be tempting because of free gift incentives or offers of discounts. It is fine to take advantage of these but the balance must be paid off immediately, otherwise excessive interest fees will be incurred. In fact, the best advice is to avoid store cards altogether, because store card debt can mount up very quickly due to the high interest rates and it is best to keep temptation at bay."

Tom Smith
25th January 2007