Whilst many consumers have become addicted to using store cards in the UK over recent years, it seems that more and more people are realizing that store cards can be a very expensive method of getting credit not to mention more restrictive than using other forms of credit. Whilst many industry experts have warned consumers about the high cost of using store cards over recent years, many people have continued to use them, often being enticed into taking them out at the point of sale in shops through the offer of instant discounts on the purchases that they are making.
However, it seems that people are finally getting wise to the cost of using store cards, which can come with crippling rates of interest that are much higher than competitive credit card rates. Figures have shown that the level of spending on store cards has fallen by a significant 20 percent in the past twelve months. Whilst all forms of consumers spending having fallen during that period the biggest fall has been with store cards.
The figures were released by the Finance and Leasing Association, with the report also showing that credit card spending fell by 2 percent during the twelve months to August of this year, second mortgages fell by 10 percent during that time, and spreading repayments via credit from retailers fell by 8 percent. Car finance, on the other hand, was said to have increased by 1 percent.
Whilst store card spending has decreased by a fifth in the past year, there may be a change in figures over the coming months, with stores getting ready to push their cards in the up and coming Christmas period. However, consumers need to be mindful of the crippling rates of interest that they may have to pay if they spread their repayments on a store card, potentially making other finance options more viable.