Store cards Christmas special

Christmas is just days away now and you may be tempted to take out a store card by persuasive staff and special offers. Make sure you don't fall into the trap of keeping a strict eye on the balance of your card, as this could be a very costly mistake warns Moneyfacts.

Most store cards will offer an introductory discount on your shopping, followed by special offers or loyalty schemes. But the downside lies in the rates of interest charged.

The average store card charges interest at a whopping 24.6 percent, that's eight percent higher that an average credit card, and four times that of a best buy personal loan.

Take for example an average store card, with an interest rate of 24.6 percent requiring a minimum repayment of 3 percent (min £5). To repay an initial balance of £500 would take a staggering 11 years and 10 months, with the total repayable over double your initial spend, at £1,082.98. It seems that the 10% or 20% t initial discount on your shopping does not seem so attractive in the longer term.

By all means make the most of the discounts on offer, as these can be especially worth while on larger purchases, but don't let your initial saving go to waste by paying the sometimes exuberant rates of interest.

If you find yourself unable to repay your balance in full, most credit card companies will accept balance transfers from store cards. With balance transfer deals available of up to 0 percent to 1.1.08 (fee 2 percent, min £5) or lifetime deals as low as 3.9 percent, this is certainly an avenue worth exploring and could save you hundreds in interest.

More tips on how to budget for Christmas.
Apply for a personal loan.