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Consumers "should`t be pushed to take on more debt"

03/08/2007

Lenders should not "incentivise" consumers to take on more debt than they can repay, an expert has claimed.

Martyn Saville, senior researcher at Which? said that responsible lending could help consumers stay clear of debt problems, particularly regarding store cards - which usually carry an APR that is higher than a conventional bank-offered credit card.

"You should only take out a store card to get a discount if you can repay all the money when you get your first statement, as this means you avoid paying any interest," he advised.

Additionally, Mr Saville remarked that all patterns of a consumer`s borrowing habits should be assessed by lenders before offering credit.

"Consumers should also not be unduly pressurised or incentivised to take on additional debt, be it through marketing [or] unsolicited credit limit increases," he commented.

Some 11 million Britons own a store card and they are estimated to cost a total of £55 million per year in interest payments, according to Moneyfacts.co.uk.

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