Penalty Charges to be Imposed on
Shoppers who do NOT use Their
Store Card
It’s easy to get lured into attractive introductory store card deals and the promise of money off, but shoppers who have signed up could be hit with new charges for not using their store card.
Spanish banking giant, Santander, has written to customers informing them of changes to the terms and conditions of store cards issued by a number of British high street chains on its behalf.
“These absurd charges mean you now get stung by high interest when you use them or stung by additional charges when you don’t.”
Buried in the new small print is a policy which allows the bank to charge a £10 fee to customers who do not use their store cards for a period of six months.
The bank provides store card services for some of Britain’s largest high street chains, including House of Fraser, Debenhams and Laura Ashley.
The move is set to hit not only bad credit customers but even customers who are careful about using their store card, some of which charge almost 30% interest.
“Many people argue that by paying by store card you don’t feel like your really spending money, so it’s easier to get carried away,” confirmed Mr James of Bad Credit Loans 4 You.
“But consumers will have to be extra diligent to ensure they don’t encounter bad credit debt or eventually need bad credit loan refinance to help them with their bad credit concerns.”
Being one of the most expensive forms of credit, store cards are heavily promoted, especially over the Christmas period, with introductory offers such as an attractive percentage off the overall shopping bill.
Many shoppers’ sign up for store cards to specifically take advantage of these offers without ever intending to borrow money at the high interest rates they offer.
Some even planned to originally pay cash or use their debit card for their purchases, but were tempted into taking out a store card because of the added incentives.
It is these customers who are most likely to be hit by the new charge which is hidden among a number of terms and conditions related to the new Consumer Credit Directive in a letter to card customers.
The bank also warns that it now has the right to cancel cards which are not regularly in use.
When contacted about the new changes, Santander simply said it was ‘aligning the store card business with the conditions of its Santander Zero credit card.
Customers with this card are already charged a fee for not using it.
Some consumer groups have hit out at the charges, believing they are unfairly penalising customers with unexpected charges which were not in the original terms and conditions.
Michelle Slade, from consumer champion Moneyfacts, said; ‘Lots of people get a store card for Christmas and then forget about it.’
‘If they enforce this, many will be caught out.’
She believes that many would be hit with unexpected bills, or find their cards cancelled because they use them only once a year.
A Santander spokesman said it had no current plans to charge dormant customers and although it reserved the right to charge a fee, it would contact shoppers before doing so.
“We would write to customers to notify them and offer them the option to use their store card to avoid the charge,” a spokesman added.
The Government has previously proposed capping interest rates for store cards in an attempt to curtail the numbers of people suffering with bad credit debt.
There were also plans discussed to introduce a seven-day cooling-off period for store cards.
Despite high interest rates, the cards remain popular, with nearly 13million in Britain and around £2.2billion being spent on them in the past year.
Miss Selfridge and Wallis store cards, which are operated by Santander, charge just under 30% interest.
Bad Credit Loans 4 You helps out people who fear they have been blacklisted because of past poor credit history which could include CCJ’s and defaults, arrears, late credit card payments or repossession.
Bad Credit Loans 4 You holds a Consumer Credit Licence issued by the Office of Fair Trading.
Bad Credit Loans 4 You is also covered by the Financial Ombudsman.
Bad Credit Loans 4 You is also registered with the Information Commissioner’s Office for Data Protection.
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Bad Credit Loans 4 You was formed in order to ensure people with bad credit had access to specialist help in securing the bad credit loans they need.
From its UK head office in Monks Brook, Loans 4 You operates across Britain, sourcing bad credit loans for people with bad credit.
Bad Credit Loans 4 You holds a Consumer Credit Licence issued by the Office of Fair Trading.
Bad Credit Loans 4 You is also covered by the Financial Ombudsman.
Bad Credit Loans 4 You is also registered with the Information Commissioner’s Office for Data Protection.
