Retailers will soon not be able to offer discounts and freebies as a way of enticing customers to take out store cards, says consumer minister Ed Davey.
Following a government review on consumer credit, from end of March next year store cards can no longer be sold based on the discounts and incentives they offer at the till.
Instead, they must be sold based on their credit and account features.
In a written statement to Parliament, Davey says the greatest cause for concern surrounding store cards is "the ease with which customers are tempted into expensive credit by retailers offering discounts on their purchases at the time they take out a store card".
On the back of the review, a new voluntary code of practice has been drawn up between the British Retail Consortium (BRC) and the Finance and Leasing Association (FLA).
In addition to banning retailers from promoting the benefits at the point of sale, customers will not be able to redeem any special offers or discounts until seven days after they've taken the card out.
"Introducing a week-long separation between taking out a store card and receiving discounts is a common sense compromise, which will give people enhanced consumer protection," says BRC director general Stephen Robertson.
Under the new code, which will be voluntary, shops will also have an obligation to train staff selling the store cards, and staff cannot earn commission for promoting them.
Mike O'Connor, chief executive of Consumer Focus, welcomes the government's proposals for store cards.
"Preventing retailers offering discounts on their purchases at the time they take out a store card will allow consumers to take time to consider their options before taking out this expensive type of credit," he says.
Consumer credit review
The government's review also addressed unarranged overdraft charges and payday loans.
It includes voluntary measures agreed with the banks to notify banking customers when their balance is low from March 2012.
From September 2013 it promises a new guaranteed switching service, which will allow customers to change accounts within seven days.
The payday loans market will also be examined more closely with Bristol University's personal finance research centre carrying out research.