More needed on store card reporting

The Competition Commission's rulings on store cards have just come into force. Among other things, the Competition Commission requires all store card providers to print 'wealth warnings' on statements if the annual percentage rate is 25 per cent or more. They must also include a box which details interest payments, penalty charges and the danger of making minimum payments. These changes have been welcomed by a number of organisations, though the consensus is that more action is still needed.

Nick White of USwitch commented: 'Whilst the new rules for store cards that will come into effect tomorrow are a small step in the right direction in terms of improving transparency, it appears the Competition Commission is closing the stable door after the horse has bolted. We believe that consumers need to be made aware of high APR’s on store cards (up to 30.9% APR) at the time of signing up to these deals so they know exactly what they’re getting.'

Robert Kenley of Moneysupermarket.com said: 'While the measures put in place today aim to make the store card market clearer, this still is not enough. A better action would be to force the card operators to cull their APRs, so that consumers cannot possibly be subjected to such high interest repayments. Store card providers have relied on their 'point of sale' offering – tempting customers with money off their new purchase. However, people should only take advantage of these offers if they are confident they can pay off their balance in full, so they are not stung with a hefty APR.'

David Kuo of the Motley Fool stated: 'This is a welcome move for consumers - the big stores have been milking unacceptably high interest rates for too long now. However, more can still be done to ensure that the horse is put before the cart and not, as it stands, the other way around. Consumers do need to be warned of what they are signing up for at the time of applying for a store card – it’s too late after they have incurred debts that they can’t afford.'