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Watch out for extra fees

23/ 6/2008

STORE cards are expensive to use at the best of times - but some come with extra costs you might not expect to pay.

In 2006 the Office of Fair Trading (OFT) ruled that if you make a late payment or exceed your credit limit on a credit card, you should pay no more than a £12 penalty fee.

While this ruling was aimed at credit cards, the principle behind it - that such charges should be fair - also applies to store cards.

Clydesdale Financial Services (now known as Barclays Partner Finance), which operates store cards for shops including Jessops and Hobbs, was recently caught charging default charges of £22.50.

It only cut them back to the £12 limit when the OFT highlighted the problem. But a Which? Money investigation has found that Clydesdale is not the only store card lender to charge more than £12.

When we checked in late April, clothes store Monsoon was charging £15 for defaults and the Duet store card, which is operated by Creation Financial Services and can be used in shops such as Carphone Warehouse and JJB Sports, was charging £20. When we challenged Creation, it declined to comment.

An OFT spokeswoman said: `We are of the view that charges in general should be a fair reflection of the costs incurred.'

Store cards charge an average of 24.9 per cent interest on outstanding balances. By comparison, the Best Buy Barclaycard Simplicity Visa charges 6.8 per cent.