A survey from price comparison site Gocompare.com has found that nearly 7.9 million* UK consumers use a store card, but 5% of people questioned admitted that they had no idea what rate of interest was on these cards, and 4% said they felt pressured into signing up for them.
Over one in ten (12%) said they believed that store cards were like loyalty cards, with 15% saying that they liked using them to collect loyalty points from their favourite stores.
The North East was the region which admitted to having the most store cards, with just under a quarter (23%) saying they had one in their wallets or purses. The area with the fewest store cards was the South East with only 9% saying they had one.
High interest rates put off many from getting a store card with more than quarter (28%) of those surveyed saying they had never had a store card for that reason, and just over one in ten (12%) saying they had a store card that they had never used.
Gocompare.com's credit card expert, Matt Sanders, said: "Store cards are handy if you're a loyal customer at a certain shop and you can guarantee that you are going to pay off your balance at the end of the month, but the interest on these cards is generally much higher than your average credit card.
"The interest on store cards can be up to 29.9%**, compared to the average interest rate on a normal credit card which is around 16.9% at the moment."
Matt added: "Don't be tempted by the deals they offer you at the till. Saving money on your first purchase using the card will be completely wiped out by the interest you pay at the end of the month. But, if you are planning on one big splash out at your favourite store, a percentage saving on a large amount could save you cash, as long as you pay off the balance as soon as you get the bill.
"But, be realistic about how and when you can pay it off. If you are using the card for your Christmas shopping getting a large store card bill in the New Year may not be the best way to start your resolutions and the longer it takes to pay off, the more interest you pay. There are so many good credit card deals around at the moment there's no need to pay an above average amount of interest.
"Another thing to consider is that if you get your application for a store card declined, your credit score will be affected. Unsuccessful credit applications, whether they are cards or mortgages, are detrimental to your credit score. A bad credit score means you are less likely to be approved for credit in the future, so signing up for a card on a whim could have long term consequences.
"Use your plastic wisely, get the best card for you and your circumstances, be realistic with your payment plan and don't be pressured into getting a card you don't want and realistically don't need."
Notes to editors:
On the 4th to 5th August 2013, Vision Critical conducted an online survey among 2,001 randomly selected British adults who are Springboard UK panelists. The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current age, gender and regional data to ensure samples representative of the entire adult population of Great Britain. Discrepancies in or between totals are due to rounding.
*UK adult population in 2012 according to ONS figures is 49,667,327. 16% of those Gocompare.com surveyed said they had at least one store card. 16% of 49,667,327 is 7,946,772.
**Dorothy Perkins and Burton's store cards have a representative APR of 29.9%.It states on the Dorothy Perkins and Burton websites that: "At least 51% of people who apply for and are accepted for the Card receive a rate which is equal to or less than the Representative APR."