Consumer Debt is becoming unmanageable due to Store Cards
Consumer debt is becoming unmanageable as high street shops continue to sell store cards with sky high interests rates, as high as 25%-30%. Charities, consumer groups and the Bank of England are concerned about the growing problem.
High street stores are enticing customers to take out a store card with incentives such as 20% off they’re first purchase. However, the customer usually needs to use the store card to redeem the offer which creates more debt.
The problem is that many employees are selling the store cards to the customer without explaining the consequences of unpaid debts. This is due to the fact that many of the stores incentivise their staff for every store card sold.
If the store cards were used to the customers advantage; using the offers and then paying off the credit card straight away, then the store cards could be beneficial and a smart way to shop. However, and unfortunately, many customers aren’t informed on the possibility of debt and so the aforementioned theory is not the reality.