It has not been a good year for store cards. Lambasted earlier this year by the Competition Commission for overcharging cardholders by at least pound;55 million, providers now face the ignominy of slapping a compulsory “wealth warning” on statements.

These statements, which come into effect next May, will inform consumers that they could get far cheaper credit elsewhere.

So, you’d think that would be it - we would all wake up to the fact that with nine out of 10 store cards charging 29.9 per cent interest, they just do not make good financial sense.

But no. It seems the temptation of 10 per cent off at the till if you apply today is still enough to hook us.

There are 11 million store card holders out there, with outstanding balances of pound;2 billion. A nice little earner for the High Street - particularly when most charge a late payment fee, sometimes as high as pound;15.

“Consumers see the special discount or shoppers’ evenings but they don’t really envisage running up a bill,” says a Competition Commission spokesman. “Store cards are an expensive way of borrowing money.”

So why bother?

Well, if your favourite High Street shop has a loyalty voucher scheme and you can trust yourself to pay your bills as soon as they pop through your letterbox, then it’s worth considering. Monsoon and Laura Ashley are just two chains which, for every pound;1 spent, award points which are converted into vouchers.

If you are considering a serious home makeover, then the Swedish chain Ikea card might help you spread the cost. With an interest rate of 12.9 per cent it boasts the lowest rate of any store card offered by a UK retailer. And supermarket chain Argos has a “buy now, pay in six months” scheme with its card.

But by far the best option is to go for one of the new shop-branded credit cards before you go shopping.

Typically, they have an introductory zero per cent interest rate on all purchases for a fixed period, can be used anywhere but award loyalty points when used in the shop whose name they bear.

Zero per cent or 29.9 per cent? Think before you apply

HOW STORECARD COSTS AND BENEFITS COMPARE

Store 0% purchases Balance

transfer Loyalty points

Asda 6 months 0% for 6 months yes Marks Spencer 12 months 3.9% yes More card

John Lewis 6 months 0% for 6 months yes

Amazon.co.uk until Feb 07 until Nov 07 yes

Tesco Clubcard until May 07 until May 07 Clubcard points

credit card

Source: TES magazine