When you're a little strapped for cash but can't stop yourself from shopping what do you do? I can tell you what I do, I save and wait until I have enough money to buy what I have been wanting for so long. I'm patient and ignore the extra 20% I can get off my entire shop if I get a store card... why, you ask? Store cards can not only damage your credit rating but they can also get you into lots of financial trouble if you are not careful. OK so with some store cards you can get regular discounts and promotions, you can even get something like £300 instant credit which sounds pretty amazing right? Let me tell you about all if the hidden negatives of a store card which may make you rethink about getting one and save up instead.
It's all well and good having £300 instant credit but you will have to pay that back, most of the time you will get an interest free offer but that will end and usually it's after about a month or two then the charges come rolling in. With an APR of 28% or more can you really afford to start paying everything back when you had no money in the first place? Some companies will even charge you an annual fee for the 'convenience' of having the card and if you fail to pay the minimum payment for the month you will get an extra charge on top of that! Cheeky.
Store cards can be also addictive a little like shopping itself but when you think about all this 'free' money you have and that holiday you have next month it's easy for things to spiral out of control, first it's just a new bikini for your holiday and next it's a whole entire new wardrobe! You have to be so careful, just think do you really need that extra pair of shoes?
Store cards are very different to Loyalty cards, you don't earn points that you can later use to get a discount on your shop it's basically a card that you can buy things on credit but of course with all of these cards you need to pay interest back and they often charge much higher interest than your average credit card especially when you go into debt. To avoid paying high interest charges you should aways try and pay off your bill in full each month or alternatively if you have a store card already and are struggling with the charges you can also transfer your balance onto an 0% interest balance credit card to help pay off the debt quicker and easier.
Still thinking about getting that store card for a measly discount and convenience? Id love to know if you have one and your thoughts on them, of course if you are sensible then they can be OK but personally they are not for me.