Money Grouse: Customer finds store credit can cost more than expected

TED Harrison of Sittingbourne, Kent, bought pounds 1,000 of video and television equipment from a Comet electrical store last Christmas Eve. The store was promoting interest-free credit and Mr Harrison filled out a form for a Comet Time Card, thinking this was the key to borrowing free of charge.

'After a few quick checks by the shop staff I walked out with my goods,' he said. 'In the cold light of January I realised that my purchase was not under a 'nought per cent' interest deal but interest would be clocked up on my purchase at an APR of 32.9 per cent.

'I learnt this when my first Comet Time Card statement arrived. I cancelled my direct debit before Comet had had time to take any money out of my account, looked carefully at the statement and saw that my outstanding commitment to the company was the same as the value of my purchase.

'As with any credit or charge card it appeared, according to the statement, that as long as I paid the outstanding commitment off in full, no interest would be charged. This I did by the day required.'

Next month, though, Mr Harrison received a statement with interest charged to it. 'By April I was being told that I was paying interest on my interest on my interest and that in future my account would be charged pounds 7 for every letter they sent to me.'

Credit facilities for Comet stores are provided by Time Retail Finance, a sister company of Comet, within the Kingfisher group. Jackie Brock-Doyle, a spokeswoman for Kingfisher, said that Mr Harrison had signed up for an interest-bearing loan to pay for his television and video. Nought per cent interest was not on offer on these items. But since there appeared to have been a misunderstanding, the interest charges would be waived.

She said the Time Card was not a conventional credit card. It was given to all customers who had arranged any type of credit facility with Comet, B&Q or Woolworth stores. It proved that customers had been approved for a loan so that if they wanted another one they did not need to be credit-scored again.

She added that Time Retail was reviewing interest-bearing loans to see whether borrowers should be offered deals that worked like a conventional credit card, allowing borrowers to repay early and avoid interest.

Write to Money Grouse, The Independent, 40 City Road, London EC1Y 2DB. Include a daytime telephone number. Do not send SAEs or original documents.