Cheap Now Expensive Later

Summary
Thousands and thousands of us use store cards but are these people conscious of the horrendous levels of interest they demand? Read this article to find out how store cards work and to get some good advice.

We will start by being honest, we’re not huge fans of shop credit cards. Although, there are more than fourteen million store credit card holders with overdue balances of well over four billion pounds. And approximately 85 chain stores manage shop cards, mostly large DIY retailers, department stores and clothing retailers.

Store cards, are a branded card which may only be used in one particular shop or chain. By tradition they are the most costly supply of credit, charging up to and over 35% interest yearly. That is far higher than the standard local bank credit card. As the typical store card balance is around £800, that would that would cost card holders £280 a year simply in interest. That kind of cost can easily mount up becoming an insurmountable debt .

Taking the positive side of shop cards, they are convenient as the stores generally promote them with discounts off the goods bought on the card and they might also provide an extended interest free period. Customers would also get unique discount offers sent to them in the post or be told of new stock ahead of other people.

On the other side, peril awaits those who are easily tempted by ”nothing to pay for 6 months”, “interest-free” or discounts offers above all those who may already be struggling with their debt . These credit card holders could be using them precisely because they haven’t got the money to pay the full amount now and they are purely hoping that things will be better later. Not the perfect plan!
High street stores also need to be concerned about forceful sales people promoting shop cards to customers who have little understanding about how to manage their use of the store card. In our opinion, it is extremely easy to sweet talk someone into signing up for a store card, but if you are unable to pay off the total amount during the interest-free period these cards are a very expensive source of credit .
We do admit that the cards can be very enticing when if you have one, they give a discount on your shopping billin order to be able to claim the discounts on your shopping.

Nonetheless, it can be all too easy for debts on your shop credit card to shoot out of control.
Thus, as a general rule we recommend refuse store cards unless you are absolutely confident} that you will pay off the whole amount immediately the store card bill comes.

Debt management companies are frequently pressing the financial regulators to increase interest rate warnings. They believe that statements for shop cards ought to include a coloured underlined warning exposing their APR interest rate and what the holder is required to pay if only the minimum payment is made.

Consequently if you do make your mind up to accept a shop card be very certain how much it will cost you. We concede that many UK shoppers find shop cards to be a tempting way to get hefty discounts on their shopping. But please, let us tell you again, always promptly pay off the full amount every month. If you do this, you can benefit from the bargains, but not have debt, therefore you will have enjoyment and peace of mind