Store cardholders warned of pitfalls in OFT campaign

The office of Fair Trading drew blood this week when it published an innocuous-looking leaflet, Are You Store Card Smart?, advising the public on the best way to handle credit cards issued by retailers.

The main issuer of store cards, the US-based GE Capital, immediately hit back by saying that it was being denied a level playing field, and that the OFT's advice applies equally well to credit cards generally.

The tips include:

* Check the card's APR, especially if you don't plan to pay off the full balance every month;

* Consider the payment pattern as a high APR could outweigh the benefit of an initial discount;

* Check the minimum payment, how long the interest-free period is and any late payment charges;

* Do you need or want payment protection insurance;

* Think about whether other forms of payment would suit you better;

* Don't sign anything until you have considered it carefully,

Launching the campaign, John Vickers, the OFT's chairman, said: "If used wisely, store cards can be useful for consumers. But always remember that they are a serious credit commitment."

A spokeswoman added that the decision had been made to concentrate on store cards rather than credit cards following the OFT's study into store cards services, which resulted in a market reference to the Competition Commission.

But GE Finance said: "We are concerned to see a level playing field when assessing consumer credit. It's good that the OFT has acknowledged the benefits of store cards, but we believe that they should not be looked at in isolation."