Get rid of Store Cards - Start saving
If you have a range of credit products, including store cards, you will probably be paying over the odds for your purchases without even knowing it. Read on for more information on store credit cards - and why they are costing you money.
Whats the deal?
Often high street street stores offer a range of credit cards to customers with an introductory offer such as a 10% discount on the purchase if you sign up for a store credit card. The staff in these shops are targeted on credit card sales, so will be keen to get you to sign up at every opportunity. Be very wary, as these introductory offers are overshadowed by high a high APR, and will cost you money in the long run.
Some interest rates from popular high street stores:
Topman Store Card - 19.9% APR
Burtons Store Card - 28% APR
Marks & Spencer Card - 23.9% APR
Debenhams Card - 18.9%-29.9% APR
As you can see, just from these highstreet examples, that high interest rates are commonplace. Don’t forget this when considering making that application, as you will often be better off purchasing the items with cash, or using your existing cards.
How to beat the Store Cards
Store cards are used by companies to catch out the shopaholics
If you do decide to go ahead with getting a store card, make sure you are one step ahead of the system and don’t give these stores more of your money! Set up a direct debit so that funds are automatically withdrawn from your account. That way, the store wont be able to charge any interest on your purchases, saving you from overspending uneccesarily.
If you are making a large purchase in a store, you may benefit from an introductory discount if you sign up just for the purchase. One you make the purchase, pay off the card and close the account.
Also, If you decide to stop shopping in a certain store, be sure to pay off the card in full and ask for the account to be closed. Your credit rating is affected by owning multiple credit products (including store cards), so leaving them unused in your wallet could potentially damage your credit rating. Cut them up and move on.
One last tip:
If you are signing up for a store card, be sure to avoid payment protection or any other auxillary insurance product on the card. These are another cash cow for the lenders, and offer very little to average customers.
NB: Applying for store cards can affect your credit rating - so make sure you fully understand what you are doing before signing up!
Comments
Tell me what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!
