A £300 iPod could cost you £405 with an Argos Easy Shop store card, this month’s Which? warns.
If you used the card and paid back the money over 27 weeks, the rip-off annual percentage rate (APR) of up to 222.7 per cent would add £105 to the price.
The card is from Bradford-based credit company Greenwood Personal Credit. It’s also available from Provident Personal Credit, but with an APR of up to 152.3 per cent. Both are owned by Provident Financial.
Consumer Credit Act
You could buy the same iPod on Argos’ own store card and pay no interest if you paid back the money in less than nine months. The Argos store card also has a lower, but not cheap, APR of 25.9 per cent if you borrow on it.
Provident defended its rates: ‘We lend small amounts, typically £50 to £500, with weekly repayments collected door-to-door by specially trained agents. We don’t charge anything for late payments.’
Argos said: ‘Argos is not involved in managing the card, marketing or promoting it.’
From April 2007 a revised Consumer Credit Act will make it easier to challenge unfair credit agreements and this could include challenging interest rates.