Consumers should be wary of store cards

It can often seem like too good an offer to refuse; you take your clothes or CDs to the till, with the exact money ready, when the smiling assistant asks you if you would like to pay ten or even twenty per cent less for them.

Of course, the catch is that you will need to sign up for a store card there and then, but, hey, you think, you won't even use the thing, just take your discount now and throw the card straight in the bin when it arrives.

Another little victory for the consumer David against the corporate Goliath.

The same could be said for all credit cards and loans.

Were it that simple, British consumers would all be taking advantage of credit card companies and getting money for nothing instead of drowning in billions of pounds worth of debt.

The fact is, one you get a store card out, you are quite likely to use it, particularly considering the additional savings and benefits many of these products boast and indeed there are around 11 million people out there who have taken the high street stores up on their offers.

The important thing is not to practice complete credit card abstinence but, like with all finance matters, to keep on top of your lending.

The latest figures on store cards released by the consumer watchdog Which? make for truly frightening reading.

According to recent research, consumers fork out around £55 million each year on interest payments for store cards, due largely to the extortionate fees many of them charge.

In comparison to the APR of the Barclaycard Simplicity Visa Card, cards issued by the GE Capital Bank, which include those offered by Wallis, Burton and Dorothy Perkins come with a rate of 29.9 per cent.

Given these rates, any initial savings made at the till will soon start to look insignificant the moment you miss just one payment and these things can be hard to keep on top of should you have come home with a wallet bursting with plastic after a weekend shopping spree.

Goliath has, however, fought back at such concerns, adopting the stance so often taken by breweries and casino operators and extolling the virtues of self-restraint.

Dale Atkinson, a press officer for the British Retail Consortium (BRC), said: "As long as the rate of interest on store card debt is made clear to customers at the outset and there is full transparency of all terms and conditions, consumers should be able to make the appropriate choice for themselves."

The BRC are quite right to point out that shoppers can benefit from these cards and are only at risk should they be irresponsible with their personal finances.

However, stores and credit card companies are not charities whose aim is to aid the financial well-being of their customers.

By all means take the money and run, but always be sure to have a pair of scissors handy should temptation get the better of you.