Shop payment card branded 'wicked'
Updated on 27 October 2008
A payment card aimed at low income consumers that charges a 222.7% APR has been branded "wicked".
The Easy Shop Card is offered by home credit firm Provident Financial in a tie-up with catalogue shopping group Argos. People are charged £35 to borrow £100 on the card if they repay it at a rate of £5 a week over 27 weeks, giving an APR of 222.7%.
Liberal Democrat shadow chancellor Vince Cable described the promotion of the card in the run up to Christmas as "wicked". He said: "A lot of people are finding it increasingly difficult to borrow from the mainstream high street banks. Many may well feel they have to fall back on things like this."
Mr Cable added: "There is a real risk of a very large number of people being exploited as a result.
"In my view it is wicked to be promoting such high interest cards and loans at Christmas, when people feel under pressure."
The APR falls to 82.9% if the money is repaid over 100 weeks at a weekly rate of £1.70.
People are able to borrow up to £300 through the card, but the money can only be spent at Argos. The loan is repaid on a weekly basis to Provident Financial agents who call at people's homes.
But Provident Financial defended the card saying it was no different to other home credit loans, except that people were given the money on plastic rather than in cash.
The group said the £35 for borrowing £100 was a charge rather than an interest payment, adding that people would not face additional penalty charges or interest ones if they got behind with repayments.
It added that the APR figure was misleading due to the short time frame in which the loan was repaid.
These news feeds are provided by an independent third party and Channel 4 is not responsible or liable to you for the same.
