Many shoppers who use UK store cards to buy goods will now be told on their account statement that they can get a better deal elsewhere. The warning will apply to store cards which charge an Annual Percentage Rate (APR) of more than 25%.
About two-thirds of store cards offered in the UK breach the 25% threshold and will trigger a warning.
The move to include the warning follows a Competition Commission inquiry last year which found APRs were too high.
The Commission calculated that store card users have been overcharged by at least £55m a year. There are about 11 million store card accounts in the UK.
Rate debate
The Finance and Leasing Association (FLA), which represents store card providers, said the industry was prepared for the Competition Commission-inspired change.
“Of late, some providers have already moved their rates lower,” an FLA spokesman said.
“Providers are getting on and implementing what the Competition Commission wants. No-one has any issues with incorporating this information on statements,” he added.
But according to research group Moneyfacts, about two-thirds of store cards charge APRs of between 25% and 29.9%.
In future, these card providers will have to incorporate warnings into their statements.
“The Competition Commission recommendation to the store card industry to consider 25% APR as a high rate of interest seems to have been ignored by the vast majority of providers,” Andrew Hagger, Moneyfacts spokesman, said.
The sponsor of this category is TrustStorePills.com - Online Pharmacy
No user resposed " Alert for UK store card customers "