Which are the worst store cards?

Which are the worst store cards?

It is hardly news that Britain is "addicted to debt". But the Tory call for new powers allowing the Office of Fair Trading to penalise retailers charging "excessive interest rates" puts store cards back into the spotlight. Some stores hit consumers for 29.9% interest, double the typical credit-card rate.

The Tories calculate that we owe £2.2bn on store cards - with the number of accounts almost doubling to 13.4m since 2003. The bulk of the debt is held by the cards' main targets - the young and those with poor credit records, who find it hard to qualify for lower-cost bank plastic and are often sucked in with free gifts or discounts. Come-ons such as "exclusive sales" and "cardholder evenings" help divert attention from high interest rates and tough terms and conditions.

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But there's not always a clear correlation between interest rates and what you might think is the risk profile of typical customers. Figures from Moneyfacts show that upmarket Selfridges charges 27.7% - way above both Topshop at 19.9% and Monsoon at 18.9%.

It also costs more to get credit at Selfridges than at Debenhams or House of Fraser (both 19.9%).

The mid-market Warehouse has a rate of 27.4%, and Jaeger charges 24.9% but does offer its well-heeled cardholders free garment alterations. If you need store-card credit for home improvements, B&Q (23.9%) is less expensive than Homebase (27.9%). But the dubious honour of topping the table goes to Burton, Dorothy Perkins and Wallis - all charging 29.9%. With that rate, if you never made any repayments you could expect your debt to double in two and a half years.

If you want the discounts without the debt, the best advice is to pay off your purchases immediately, and then cut up the card. Otherwise, you're almost always better off with a credit card - provided you can get one.

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