Many store card providers have put up the cost of borrowing on their cards, despite the fact that watchdogs are criticising them over high charges and that they are already charging some of the highest rates in the industry.

Many consumer lobby groups are now taking the opportunity in the midst of the credit crunch to warn consumers of the dangers of spending on expensive store cards.

Many top high-street stores including Burton, Dorothy Perkins, Argos and Marks & Spencer have increased the rates they charge on their store cards by an average of 2.7% in the past year.

Many campaigners are now advising shoppers that when it comes to store cards, avoid them at all costs. If you fail to completely clear your balance on your store card by the end of each month, then it can be one of the most expensive forms of borrowing out there. Don’t be fooled by the gimmicks and special offers that the store cards include.

Christmas spending and back-to-school purchases are two occasions where consumers are tempted to take out a card, but many customers then pay back little more than the minimum each month. This spreads the debt over a long period racking up vast amounts of interest and totally outweighing any special offers that initially attracted the shopper.

The Competition Commission reported last year that rates on store cards could be as much as 20% more than they should be and were ending up costing British consumers’ an average of £55m too much each year.

Despite the heavy criticism in the report store cards have actually gone up in cost. For instance the average store card now charges a rate of 24.3%. Some store cards however, charge rates of as much as 29.9% compared to an average rate of 15.9% for credit cards, store cards are a very expensive option.

Shoppers faced with a steep store card bill that cannot be easily cleared would be better to switch the debt to a 0% credit card or a debt consolidation loan.  Equally, those who know that they need funds to cover holiday periods or school equipment would be wiser taking out a fixed sum on a personal loan.

Provided that the customer is not tempted to take out more than they need, a loan is a wiser bet. By calculating in advance what repayment sum can be afforded monthly, the customer is committing themselves to regular repayment, rather than chipping away at the debt in minute amounts, always with the temptation to add more to that high-cost store card.