Store cards Which? verdict on store cards

James was given £2,750 credit on six store cards

James' story

James Smith is a 21-year-old graduate who has earned less than £1,000 this year. 

With that in mind, he shouldn’t really have been able to rack up £2,750 worth of credit on six store cards in three days. But he did.

The aspect of our store card investigation that shocked him most was the ease with which each of his applications was made. 

He told us: ‘Granting someone credit is an important decision, especially when you’re an unemployed 21-year old with no money. 

'But each of my applications was treated with no more seriousness than if I were joining a mailing list’.

Most of the shops filled out his applications for him, which not only meant he had to constantly answer personal questions regarding his income (or lack of it) but also that he had little chance to see any terms or conditions. 

‘Worst of all,’ he said, ‘next to no one asked me for permission before they ran a credit check, and most didn’t seem to realise that this mattered’.

He told us that the most bizarre outcome of his experience as a Which? undercover investigator was being sent a MasterCard by BHS under the name Mr Woodland (his road name). 

‘It’s got a £1,500 limit on it,’ he said. ‘If I wasn’t helping Which? with an investigation, I’d be heading out to buy a new iPhone – and would worry about the consequences later.’

Which? verdict on store cards

No one in James’ position should be given access to £2,750 on store and credit cards in just two days. Nor should they be able to continue getting credit after so many credit checks have already been performed in such a short space of time.

Retailers need to share more information and work more closely with credit reference agencies to ensure they know their customer before they agree to lend to them. 

There also needs to be tighter checks to ensure that shop assistants are asking customers’ permission before they carry out credit checks. And assistants need to be better trained, to ensure they explain the risks of taking out store cards.

The question remains whether stores should be handing out credit at all while people are shopping. And if retailers can’t ensure they lend responsibly, then the Office of Fair Trading should step in to make sure that they do.

To find out more about better ways to borrow money, see the Which? reviews of credit cards and personal loans.