The Competition Commission is responsible for in-depth inquiries into markets and also regulating the major regulated industries - such as finance. The Competition Commission believes that store-card customers are being overcharged by more than £55 million each year.

The Competition Commission has just finished a two year investigation into the store-card market. Consumer groups hoped that the outcome of the investigation would be to force card providers to lower their interest rates. However, those charging more than 25% will have to put a warning on the statement telling customers that they may be able to get a better deal if they went elsewhere.

Several groups have heavily criticised this are not going far enough. Several quite rightly point out that when you get your card statement with the new message, the damage has already been done!

Staff in the stores that try and push the store-cards to customers are often on an incentive for each sale - but have little understanding of the financial details or implications that these store-cards can have. Customers are sometimes badly advised on the benefits of store-cards, and end up with a very expensive product that they don't actually need.

Moneysupermarket.com calculated that if you make purchases of £1000 on a Burton's store card and only pay of the minimum payment each month, it will take you 13 years to pay off the debt - including a whopping £1158 in interest.

Cleverly, shoppers are often enourgaged to sign up for a card by discounts (typically 10%) off their first purchase. Although this 10% is not to be sneezed at, we would advise that you take advantage of the discount and pay off the full amount within a month, or transfer the unpaid amount onto a card that charges 0% on balance transfers.

If you can't afford to clear the balance in full, and don't think you'll get around to transfering the balance to another card, the we'd advise not to sign-up. You could end up paying a large amount of interest where you could pay less or zero interest by applying for a low-rate credit card, or even one that has an interest free period on purchases.

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