Consumers that spend on store cards this Christmas could be lumbering themselves with £1.9billion in interest, according to uSwitch.com, which is £1.4billion more than the same expenditure would cost on a credit card.

The average cost of Christmas is £604 per person, but this could increase by £312 to just under £1,000 each due to the “extortionate” rates of interest charged on this type of credit.

As many as 16 million shoppers will pay 47 per cent more on store cards than those using a credit card. The average interest rate on store cards is 25 per cent, uSwitch.com found, eight per cent higher than the average credit card rate at 17 per cent.

Withdrawing money on their credit cards will provide funding for an estimated 1.7 million consumers this Christmas, which will bump up the cost of the holiday season by 59 per cent as this method of spending has an average rate of 29.97 per cent interest.

The average Christmas spend will be inflated from £604 per person to £958 for those who pay for it in this way.

uSwitch.com recommends that, if possible, compare credit cards and opt for one of these over a store card, and urges people to repay more than the minimum payment.

The average cost of Christmas spent on an Argos store card charged at 27.9 per cent, for example, would take more than nine years to repay with just the minimum payment each month, and would cost an additional £534.88 in interest.

“There are tough times ahead in 2009 as consumers begin to feel the full impact of recession.” commented Louise Bond, personal finance expert at uSwitch.com.

“In light of this, Christmas 2008 will undoubtedly be on a tight budget. uSwitch.com urges shoppers to ensure that whilst being mindful of the amount they spend, the way in which they spend it deserves equal discipline.

“The worst thing to do is rack up debt on ‘easy’ credit which carries an extortionate APR. There are a number of competitive 0 per cent credit card offers in the market and consumers need to shop around for the best deals.

“People must be able to repay the debt accrued over the Christmas period in the most economical way possible.”

Research from Abbey has revealed that two thirds of Brits are running out of cash before payday in the run up to Christmas, as disposable income falls 29 percent, and 29 million have admitted that they will be making sacrifices this year.

But despite the shortage of disposable income and lack of cheap credit this holiday season, Direct Line has found that three quarters of the UK claim that they will spend as much or even more this Christmas than they did last year.

© Fair Investment Company Ltd