The Cost of a Credit Card

As Christmas approaches, stores everywhere are preparing their festive displays and taking on more staff to cope with the anticipated crowds. But one store has gone a step further in their preparations.

Without naming names, one popular UK retailer has produced a credit card they're choosing to call the 'Easy Shop Card'. This is offered to customers who are worried about buying presents for loved ones, or offered as a possible gift idea for someone, similar to a gift voucher. The difference being, of course, that a gift voucher doesn't require you to pay a high amount of interest when you purchase something with it.

The Easy Shop card perhaps carries one of the highest interest rates in the UK. The typical rate offered with the card means that to pay back £100 at £5 per week will effectively cost you £135 - an APR of a staggering 227%. At the moment, the average APR on a credit card is 17.46%, so why is the Easy Shop card charging so much over this?

Because they can. It is increasingly harder to get credit with low interest rates. Lenders are making their application processes much stricter and as a result, people are resorting to getting credit wherever they can. In the run-up to Christmas a card like the Easy Shop, even with it's high APR, will seem like a godsend for those people who either cannot afford to save or who cannot get a conventional credit card or even a loan in order to buy presents.

It might seem like the only option, but taking out a credit card with this amount of APR will only serve to dig you deeper in debt. It's far better to shop around, try to find a credit card with a lower APR; Capital One, who lend to those with a less than perfect credit score, have an average APR of 37%; and make do with that, plus a lower limit, instead.