In-store credit "can prove expensive"

29/05/2009

Concern has been flagged up on "buy now pay later" deals by a financial charity.

Credit Action said that many retailers' promotions could hit borrowers' finances over the long term - therefore increasing their likelihood of falling into debt.

The comments follow the release of a report from Financial Leasing Association (FLA) earlier in the week, showing that so-called "in-store credit" was defying the downturn.

A rise in lending levels for this form of credit of 24 per cent was registered over the past year.

However, the FLA also found that personal loan lending had fallen by over 35 per cent and secured loans were 76 per cent down year on year.

Commenting on the report, Credit Action director Chris Tapp said that the deals offered a "mixed bag" to borrowers.

"There [are] some excellent buy now, pay later deals out there at the moment which should be taken advantage of. There are also some bad deals out there," he said.

"People do need to know exactly what they are signing up for, what their rate of interest is, how long it is going to take them to pay that off, and how much money they are going to end up paying."

Tags; Debt Management and Banking, Credit Card Lifestyle,

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