There are many big chains that will offer a store card to their customers. Store cards tend to work in a similar way to credit cards and they can have some advantages and some disadvantages. It is a good idea to think about whether it is something which will work out well for you.
- Some stores will give customers special offers if they have their store card. This could include a percentage discount when you first take one out, preview sale evenings, regular discounts and things like this. It is a good idea to find out what particular stores are offering and this will enable you to decide whether you want a card to take advantage of this. If it is a shop you use regularly then it could be worth it if they have a lot of good deals.
- By using a store card you will get some interest free credit on your purchase. When you pay using the card, you will not need to pay it off until you get sent a monthly statement. This means that you can delay paying for the items. It can be good to negotiate with the card issuer that they send your statements so that you have to pay them just after you get paid so that it is easier for you know that you will have the money available to pay it.
- You will have the option of repaying the full balance and you will then not have to pay any interest and so the card will be free to use as well. You can even set up a direct debit to repay the full balance each month, which can make this really easy.
- If you do not repay the card in full then you will have to pay interest on the money that you owe. This can be expensive and it can be the case that the interest on a store card will be higher than the interest on a credit card. Therefore, if you already have a credit card it might be better to use that as the interest will be less. You will find any savings you make from special deals you get as a card holder will be worth far less than the interest you pay on the card if you do not repay in full.
- You may find that, because you have a card for that shop, that you shop there more than other shops. This could be okay, but it is important to make sure that you are not paying more money for items than you would if you were shopping elsewhere. Make sure that you compare prices carefully and do not pay more than necessary.
- You may also be tempted to spend more because you do not have to pay for it right away. Make sure that you are not just buying things for the sake of it just because you can. Check with yourself whether it is something that you really need or really want and whether you can justify the expense. Having deals as a card holder can multiply this as you may feel you need to buy something as it is reduced. Make sure you are retrained and only buy things that you would have bought anyway.
- If we get lots of different cards it can be harder to keep a check on how much we are spending on them. This means that we can end up spending more money than we can afford. So, unless you keep a careful track of what you are spending, you need to think hard about whether it is wise to get another card and risk building up a lot of debt.