Store cards ‘could create additional cost of £1,500′

Alliance & Leicester has warned Christmas shoppers that using store cards for their festive purchases could leave them with an additional £1,500 in debt.

According to research by the company, 23 per cent of people have used store cards to help them with their festive spending, over half of whom took the card simply because it was offered at the point of purchase.

Interest rates charged on store cards can be as high as 30 per cent and Alliance & Leicester claims that a substantial saving could be made if customers were willing to consolidate this cost in a low-rate loan.

Some 23 per cent of consumers in debt said they would consider moving their borrowing into a loan at a cheaper rate and 31 per cent recognised that doing this could reduce the amount they pay every month.

Richard Al-Dabbagh, senior personal loans manager at Alliance & Leicester, said: "Christmas costs can really add up, and some of the offers pushed at us by sales assistants in connection with their store cards can seem really tempting.

"A low cost personal loan could make borrowing more manageable – or at least make the start of the new year less of a headache – and it is likely to save you money in the long run."