David Prosser: Don't be fooled - get out the scissors

Such radical action is the best way to protect yourself from the big retailers, which have almost all teamed up with large credit card companies to offer store card accounts. A report from the Competition Commission this week warned that store cards are almost always hugely overpriced - interest rates are often as much as 20 percentage points higher than the cheapest credit cards.

But don't expect the Competition Commission to stop you being overcharged. This is just the latest in a series of similar warnings from all sorts of watchdogs. Store cards have been slammed time and again in recent years, yet retailers and their credit card partners have been allowed to continue overcharging at will.

Don't fall for the lenders' stories, either. Every time one of these damning reports is published, store card providers come out with the same feeble excuses for ripping people off. Chief among these is that customers with store card plastic get special deals - discounts on the shop's goods, for example, or previews of sales.

Let's nail that lie once and for all. Your favourite store doesn't offer discounts out of the goodness of its heart. It wants you to open a store card account because it knows it stands a very good chance of making far more out of you on interest charges than it will ever have to shell out on discounts or freebies.

There's no gamble involved on the store's part. You may turn out to be one of the few cardholders who always pays their bills on time, avoiding interest charges and qualifying for generous money-off offers. But store card providers have been in this game for 20 years - all their experience tells them that a tiny minority of customers beat the system in this way.

For many retailers, store cards are now one of the few sources of increasing profits. Sales assistants are told to sell the cards to every poor customer who simply wants to buy a pair of jeans because retailers are desperate to find ways to compensate for the slowdown in spending on the high street.

Let's look at the evidence. The cheapest credit cards offer 0 per cent interest for a year or longer, or standard annual rates of less than 10 per cent. Argos, Burton, Debenhams, Habitat, Harrods, Laura Ashley, Monsoon, Oasis and Selfridges - to name but a few of the best-known store card providers - all charge between 25 and 30 per cent a year.

Forget the Competition Commission's helpful recommendations - more transparency and clearer charges, for example. Just avoid these extortionate rates altogether. It's time to get those scissors out.

* * * My views on payment protection insurance - slammed this week by Citizens Advice - are similarly simple. Buying this cover from your bank or building society is almost never a good idea.

Lenders charge expensive premiums for PPI policies - which are supposed to pay out if you can't make loan repayments due to ill-health or unemployment - in order to subsidise the cheap interest rates they use to attract borrowers.

Even worse, the cover is often riddled with small print that prevents you claiming when you need to.

If you do want such cover, you will make a saving by dealing with a specialist insurance company. You are also less likely to be caught out by unfair terms and conditions.