Compare rates between store cards and credit cards before making a decision has found that there is a big difference between interest rates and the rewards on offer when store cards and credit cards from high street retailers were compared. They advised shoppers to look around for a better deal even if they are tempted by discount offers. By comparing deals consumers can save money and get extra rewards as well.

The interest rates ranged between 19.9% and 29.9% APR on store cards and between 15.9% and 16.9% on retailer’s credit cards. The credit card rates were actually on a par with other credit card suppliers. The other advantage with credit cards is that they are acceptable worldwide whereas a store card is normally limited to that particular retailer or group.

Retailers try to convince shoppers to sign up for their store cards with offers of discounts or vouchers but retailer credit cards such as the ones Tesco and Marks and Spencer are offering give the consumer 15 months interest-free on purchases. Compare that with a store card from Burtons where the consumer would build up £141.07 in interest over a year on purchases worth £500 if they only paid the minimum monthly payment.

The tempting thing about store cards is that the offers tend to be on-going. New Look are currently offering 20% off your first purchase and then further special offers and discounts for the cardholder. Most retailers do something similar. Some of the rewards with store cards take the form of points such as 1 point for every pound spent. These are then redeemable right across that group of retailers.

So, as the study says, it is well worth shopping around to see where the best deals can be found. When you do find a good deal, make sure you are aware when it ends and make regular payments so that you don’t get hit by a higher interest rate or late payment penalties.


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