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UK `must reduce consumer debt` 700k `on Debt Management Plans` Recession `could lead to financial problems for retirees` Charity sees increase in debt, mortgage and loan arrear enquiries Retirees` finances `may be damaged by rate cut` Recession `causing increase in debt problems` Consumers `aiming to reduce spending` People `increasingly turning to illegal loans` Children raised in credit crunch `may be better able to manage money` Many parents `pushed into debt by adult children` Young people `failing to protect themselves for debt repayments` Consumers in East Midlands `relying less on debt to fund lives` Plans set out to help people in debt PPI ban `could leave consumers without loan cover` Govt `must step in to stop debt addiction` Cash-strapped Brits `see fraud as more acceptable` People `should not rely on mortgage rescue plan` Consumers `to take out £3bn in debt consolidation loans by Easter` Some shoppers `reducing spending due to debt management failings` People `sharing cost of living to avoid debt problems`

"Sting-in-the-tail store cards" may cost over the odds

14/08/2008

Using store cards could increase the price consumers pay by a quarter, Alliance & Leicester has warned.

Store cards carry an average interest rate of 26 per cent – a total of three times more than a "competitive" personal loan – meaning summer bargains may end up more expensive than shoppers realise.

The bank said people who have run up debts from store cards and other means may want to consider a consolidation loan to ease the burden.

Personal loans manager Mark Boyle urged consumers to assess their debt problems.

"For those who wish to make their debt easier to manage, taking out a personal loan and consolidating it into one easy-to-manage chunk may be a wise option," he said.

According to the research, nearly a quarter (24 per cent) of British people have store cards that could be costing them money.

In related news, Fool.co.uk has said it is "hardly a shock" that consumer confidence has recently declined with living costs rising.

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