The Isle of Wight Council Trading Standards is advising local residents to think twice before entering into credit agreements in the run up to Christmas.

Many high street shops offer “store cards”, with a new version being called the ‘Easy Shop Card’. This card allows the shopper to borrow anything from £100 - £500 to spend in a particular store with repayments being regular and fixed which are collected by a local agent.

Other schemes include ‘Pay Day Loans’ which gives you a loan which is then usually paid back over a short period (for example 30 days) with a flat rate of interest repayable by direct debit.

Another is called a ‘Log Book Loan’ – this is a loan against your car where you  sign a credit agreement and a Bill of Sale. This essentially means  the ownership of your vehicle transfers to the loan company and gives it the right to take possession of the vehicle. Repayments are made weekly or monthly.

However, before anyone enters into a credit agreement, Isle of Wight Council Senior Trading Standards Officer Julie Woodhouse has some advice.

“These are all forms of borrowing which can carry high interest rates” she said. “In simple terms, this means you will pay back than you borrow. With the current financial climate and with Christmas looming, it can tempting to use one of these forms of credit and worry about the repayments later.

We want to advise residents to think very carefully before using one of these methods. A typical example of repayments on a current scheme can see you paying back £513 when you are loaned £300″

IW Council Trading Standards has issued the following guidance and tips before entering into any loan agreement.

• • How much will the credit cost you compared with other similar deals?
• • Is your home being used as security?
• • Is it the best deal and interest rate you can get?
• • Do you fully understand the credit agreement form you’re about to sign?
• • Will the interest rate stay the same?
• • Are there extra charges if you repay the debt early?
• • What happens if you miss a payment?
• • What do you have to pay each month and for how long?
• • What’s the total amount that you will pay back?
• • Can you take the credit agreement away to consider at your leisure?
• • MOST IMPORTANT - CAN YOU AFFORD THE REPAYMENTS

Isle of Wight Council Trading Standards can be contacted through the council’s main number on (01983) 821000 and can offer advice and guidance to anyone wanting more information.