The competition watchdog launched a clampdown on retailers' store cards earlier this week, demanding they highlight their sky-high interest rate charges. Under the new rules, store cards that charge over 25% APR must tell customers that they can get cheaper credit elsewhere, while statements will also include 'wealth warnings' outlining the dangers of only paying the minimum monthly repayment.

The Competition Commission report concluded that over the past 13 years, store card companies have been over-charging customers by between 10% and 20% a year.

That is why many credit experts believe the CC's rulings do not go far enough and that consumers should avoid the cards at all cost in the first place. According to some estimates around 1.5m Britons are wasting £750m a year on expensive store cards.

Some have suggested that the Commission's ruling that store cards must display a prominent warning on monthly statements if the APR is above 25% is the equivalent of closing the stable door after the horse has bolted. Consumers need to be made aware of the exorbitant rates charged by some store card providers at the time of signing up to the deals, so that they go in with their eyes wide open.

Choosing the right card in the first place could save you hundreds of pounds, depending on how much you spend down the shops.

For example, somebody spending £1,000 on the 28% APR Dorothy Perkins store card would pay £121.59 in interest charges if it was repaid over a 12-month period.

If the customer spent the same amount using Sainsbury's Bank's Platinum card, which offers 10 months 0% interest on purchases, they would just pay £3.09 in interest and charges.

It is the in-store offers that are enticing most people to sign up to the cards in the first place. Consumers will see the 10% off offer before they even look at the APR and it can be a costly mistake.

If a consumer spent £250 to take advantage of a 10% discount, they would be left with a balance of £225 on a card charging 25%. If they only repaid the minimum balance each month, it would take them six and a half years and £180 in interest to repay.

Lisa Taylor, a spokeswoman with financial data providers Moneyfacts, said: 'Putting warning notices on statements isn't going to solve the problem. By the time you receive your statement, the damage is done.

Copyright © 2005 First Mortgage Trust