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Low-income borrowers were today warned against signing up for an Argos payment card, which has an interest rate of up to 222.7%.
The Easy Shop Card, which the retailer has launched in partnership with sub-prime lender Provident Personal Credit, is aimed at cash-strapped shoppers who want to borrow between £100 and £500 to spend in the store.
The website says applying for the card is "simple and straightforward" with "no complicated forms", and that borrowers can make "affordable, fixed, regular repayments - collected by a local agent".
However, the interest rates on offer are significantly higher than those available on standard credit cards, where APRs tend to be below 30%.
On a £300 loan repaid over a year the website quotes a typical APR of 183.2%, while shorter-term borrowing attracts even higher rates.
A consumer borrowing £100 on the card would be charged £35 in interest if they repaid it at a rate of £5 a week over 27 weeks, giving an APR of 222.7%.
According to price comparison website uSwitch, a shopper using the card to purchase a Nintendo Wii console from Argos for £179.99 would have to repay £248.46 over six months.
Vince Cable, the Liberal Democrat's shadow chancellor, described the promotion of the card in the run up to Christmas as "wicked".
"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.
"In my view it is wicked to be promoting such high interest cards and loans at Christmas, when people feel under pressure."
Louise Bond, personal finance manager at uSwitch.com, said the card providers seemed to be "cashing in on desperate consumers".
"Despite the recession life does have to go on, but we strongly advise people not to be lured into this type of deal. It may seem like a quick fix but in will cost you dear in the long run," she said.
But Provident Financial defended the card saying it was no different to other home credit loans, except that people were given the money on plastic rather than in cash.
The group said the £35 for borrowing £100 was a charge rather than an interest payment, adding that people would not face addition penalty charges or interest charges if they fell behind with repayments.
It added that the APR figure was misleading due to the short time frame in which the loan was repaid.
A spokesman said: "The amount people owe can never rise. There are no interest or default charges."
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