227%: The staggering interest rate on credit card designed to 'help' families this Christmas

Britain's most expensive credit card, which carries an interest rate of 227 per cent, is being promoted as a solution for hardpressed families this Christmas.



The Easy Shop card is linked to Argos and offers one possible solution to parents who do not have the cash to buy presents for the children.



However, MPs and debt experts last night condemned the extortionate charges as 'wicked' and warned struggling shoppers to reject the card.



Argos chiefs revealed last week that the company's sales are running around 9 per cent down on this time last year.



A credit card with a 227 per cent interest rate is being promoted as a solution for hard pressed families this Christmas

The firm apparently believes that the Easy Shop card will help its bottom line in the crucial festive trading period.



A customer borrowing £100 on the card and repaying it over 27 weeks at £5 a week would pay a total of £135, which equates to an APR - annual percentage rate - of 227 per cent.



The card is produced in association with the finance company Provident Financial.



The rate of 227 per cent is based not only on the interest that must be paid but also takes into account how the loan is repaid, the length of the loan, and the timing and amount of payments.



Retail giant Argos teamed up with Provident Financial to produce Britain's most expensive credit card

The Liberal Democrat Shadow Chancellor Vince Cable MP described the marketing of cards and loans with such extortionate interest rates as 'wicked'.



Dr Cable has been warning for ten years about reckless lending and spiralling personal debt, which now tops£1trillion.



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. There is a real risk of a very large number of people being exploited as a result.'



He said the policing of credit card interest rates in the UK has been 'utterly feeble'. Dr Cable said: 'In my view it is wicked to be promoting such high interest cards and loans at Christmas, when people feel under pressure.'



Personal finance expert at the website uSwitch.com, Louise Bond, warned people against using the Easy Shop card to buy presents.



'Despite the recession, life does have to go on but we strongly advise people not to be lured into this type of deal,' she said.



'It may seem like a quick fix but will cost you dear in the long run.'



She added: 'Despite being attached to a well known high street brand, people shouldn't be fooled into thinking this is anything other than a sub-prime loan.'



Provident promotes the Easy Shop cards as a simple way to borrow and spend. They suggest people might even want to give the cards to friends and family as a gift.



The firm's website states: 'We have teamed up with high street retailer Argos to give you a great way to shop - the Easy Shop card; a plastic card that lets you shop at Argos, without the worry of overspending.'



Agents from Provident call at the homes of customers to collect the agreed repayments every week.



Argos said the marketing of the card and vetting of customers is carried out by Provident.



Provident's website promotes the card as a simple way to borrow and spend

A spokesman said: 'Purchasing a card of this nature provides customers who may not have access to other credit facilities with the opportunity to shop in our stores by securing a short-term loan.'



It said the use of the APR to show the interest charged gives a distorted impression of the cost of what is effectively a short-term loan.



>Argos said: 'By law, home creditors must advertise their lending rates as an annual percentage rate.



'Home credit companies have suggested for some time now that APR can be misleading because their loans are repaid over a short time period.'



Provident said: 'Our charging structure is fundamentally different to that of other lenders.



'Provident home credit has a single, up-front, fixed charge that customers see from the start, which includes interest on the loan, the cost of the agent's weekly visit to the customer's home and the fact that the total amount to repay will never go up - even if payments are missed.'



It said that other lenders do not include administration and penalty charges in APRs so comparisons were misleading.



The company added that it declined more than a third of loan applications last year.



