Six out of 10 store card holders are not aware of the APR on their card, says Sainsbury’s Bank. Alarmingly, more than half a million of us have over £1,000 left on store cards at the end of the month – and 92,000 of us have over £5,000, the bank has found.If you have racked up debt on store cards and want to reduce your bills, try switching the balance to a credit card with an introductory 0 per cent offer on transfers and new purchases. The new card from John Lewis/Waitrose charges an APR of 13, with an introductory rate of 6.5 per cent for six months. “People aim to pay off the balance but then forget.”But the store card market – long the b? noire of the consumer credit services industry – shows signs of change. The Ikea furnishings chain last week halved its store card APR to 12.9.The industry is also the subject of an investigation by the Competition Commission after the Office of Fair Trading found that rates charged were at least 10 percentage points higher than those of standard credit cards.The results of the Competition Commission’s investigation will be published in September, but one problem has already been identified: our own ignorance of charges.

Some of the most eye-watering charges are made by well-known retailers: 30.7 per cent at Laura Ashley and Kwik Fit, 29.9 per cent at Debenhams and 29 per cent at Mothercare.Even at the less punitive end of the scale, Fortnum & Mason charges an APR of 15.3 and Marks & Spencer 18.9.Such high rates only become an issue when you fail to clear your balance each month. Unfortunately, barely half of the 12.2 million UK consumers with store cards do this, according to research from Sainsbury’s Bank.Many people take out store cards to benefit from up to 20 per cent off purchases on the day they sign up. But incurring sky-high rates of interest makes a mockery of such savings.”Only if you are very organised and pay off your debt each month should you take out a store card,” says Anna Bowes of independent financial adviser (IFA) Chase de Vere. The idea of a “best-buy” table for UK store cards is pretty ridiculous.

Behind a veil of exclusivity and special discounts, most of these cards carry extortionate rates of interest.
Many have annual percentage rates (APRs) in excess of 27, with even the lowest standard APR nudging 13. But remember, your offspring won’t be able to get their hands on the cash until at least their 50th birthday.Next week: savings accounts for 7- to 11-year-olds. Up to £2,808 can be invested each year, which attracts tax relief. But if you do so, make sure you sign an IR85 form, available from banks, building societies and tax offices, which exempts the interest from tax. Watch out, too, if your contributions to the account generate more than £100 a year in interest, warns Andrew Shaw of chartered accountant Kingston Smith.

Anything above this amount is taxed at a basic rate of 20 per cent and deducted from your baby’s account.If you are a higher-rate taxpayer, you’ll have to declare this savings account on your self-assessment tax return and pay the difference, adds Mr Shaw. However, grandparents and generous friends can invest as much as they want into your baby’s account and the interest won’t be taxed.If you are happy to invest for the long term, you can help your offspring from cradle to grave by putting money into a stakeholder pension on their behalf. NS&I’s current issue 15 pays 4.7 per cent interest annually (with interest compounded).Alternatively, there is nothing wrong with choosing a high-interest savings account for your child, says Ms Patel. These let you save up to £25 a month tax-free for at least 10 years, either in a deposit account or in a fund linked to the stock market.IFAs tend to be lukewarm about such schemes, however, because they carry an element of life insurance, and the tax benefits can be eaten up by high annual charges.Other savings options favoured by parents include savings certificates and children’s “bonus bonds”, issued by National Savings & Investments (NS&I), because of the capital guarantees and tax breaks. All income and capital within the trust passes direct to your child at the age of 18, and when the investment is cashed in, any growth will be treated as the child’s and won’t eat into your own capital gains tax allowance.You could also opt for a special tax-free savings plan or bond for children, available from friendly societies. Focus instead on something not too aggressive, such as Lazard UK Alpha fund, that will make for a core solid investment.”By putting such a fund in your name on behalf of your baby, you can create a “bare trust”. Generous grandparents and friends are also allowed to invest up to £1,200 a year in the child’s fund.While it is hoped that the CTF will kick-start a national savings habit, any regular saving for your new baby will go a long way towards a deposit on a house, car or university costs later in life, says Meera Patel of IFA Hargreaves Lansdown.”You don’t have to be wealthy to save for youngsters,” she says.