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MN Finance and Loans Posts

How to take Advantage of Store Cards

Store cards are something that some people cannot be bothered with and others have a lot of. They work in a similar way to a credit card but they do have advantages if you regularly shop in a particular place and therefore they can be worthwhile. There are some pitfalls to be aware of as well though.

Advantages of store cards

Some shops will have discounts and offers for their card holders. This might mean a discount when you first get a card, special preview sales events, loyalty vouchers or things like this. This can mean that if you use the shop a lot you could really benefit from having a card like this. If you get discounts and the first choice of sale items you could potentially save a lot of money. It is worth checking what these are likely to be when you sign up for the card though. It is likely that some shops will have far better offers than others and so you need to be sure that you are getting the best offers.

The store cards also allow you to buy now and pay later. This means that you will get the items immediately but you will not have to pay for them until you get your bill which could be weeks after. You will then have a few weeks normally before you have to repay it, meaning that you get between four and six weeks before you have to pay for what you have bought. You will then also get the opportunity to delay the payment even longer. You will have to repay something, which will cover the cost of the loan and a bit more money, but you can leave the rest to pay at a later date which means that you do not need to find the money immediately.

Disadvantages of store cards

With not having to pay the card back immediately, it means that you can buy more things than you can afford. Although this sounds good, it means that you will have to pay interest. This can be quite high with a store card and it will mean that you are paying more for the items than you would have done if you had repaid right away. This can suit some people and some situations, but it is really important to make sure that you still feel that you are getting value for money even though you are paying out more. If you leave the outstanding balance for a long time then the costs will creep up. You will be charged every month that you do not repay in full. So, ensure that you understand the consequences of not repaying in full and add up the cost so that you can decide whether you still think it is worth buying the item.

It can be also be risky when you are offered discounts, vouchers or preview sale events because you can end up spending more than you otherwise would. This is because you feel that you will save money, due to the discounts, so you spend money. You may not have bought anything at all if you did not have the discount and now you are spending money that you might otherwise have saved. How often have you returned form a sale with items you did not need and had no intension of buying? This is where temptation and clever marketing can come in and should be avoided. This means that you need to be really careful. You need to make sure that you are only spending money that you would have spent anyway, money that you can afford and that you are buying goods that you cannot get cheaper elsewhere. With the store card you may just be tempted to shop in the one store without checking to see if you can get the items cheaper elsewhere. This could therefore be another way that you are spending more money than you need to.

It is therefore really important to be aware of what you are spending on the store card. Make sure that you are not being influenced by the store to spend more money than you can afford to and to buy more than you need. If there are things you want, compare the prices with other stores and then only buy if they are the cheapest. Do not assume that because it is on sale or you have a voucher that it will not be cheaper elsewhere; it is always wise to check just in case. So, to take advantage of the card you will need to use any discounts that you get to buy things that you need that are dearer elsewhere. Enjoy the interest free period but make sure that you repay the card in full so that you do not get charged any interest or else your items will end up being more expensive.

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Is a Payday Loan a Sensible Choice for me?

Trying to decide on whether to take out a payday loan is very tricky. You will probably have herad horror stories about them and your friends and family may be telling you to avoid them as well. However, there are situations when they can be a better alternative. It is important though to look at your situation carefully when making your decision.

Do I really need the money?

You need to start by identifying why you need the money. Think about what you will be spending it on and whether it is really necessary. This is a very personal thing as items that are necessary for some people are not for others, so only you will know yourself whether this is the case. If you can go without then you will save a lot of money due to the cost of the loan. Payday loans are designed for emergency use and so you need to think about whether you do need the money in an emergency or not.

Think about what might happen if you do not have the loan and whether you will be able to cope. If you need the money to pay a bill, phone the company and see if they can let you off until you get paid. If you need it to pay for a car repair think about whether you can delay that and use public transport or get a lift with a friend or colleague instead. If you need to buy a new fridge because yours has broken down then see whether there are any interest free deals available (which may or may not work out cheaper) or whether you can afford one if you get it second hand. There might be alternatives that you may not have considered with regards to whether you need the money.

What alternatives to a payday loan are there?

Assuming that you have decided that you do need the money, it is important to think about the alternatives. For example, if you have any savings you will be better off using those as they will be cheaper to use than a loan. If you can wait for a while before buying the item you need, then you might be able to save up some money and that would also be cheaper.

If you cannot wait to save or have no savings then a loan could be your only option. There are many loans available though and so you need to take a look at them all and think about which one is best suited to you. If you have a poor credit record then you may think the payday loan is your only option but it could be worth investigating other options too. If you need the money quickly, a payday loan will also suit you, but there may still be other loans that will get you money quickly. Do spend some time doing research though as you may be surprised at what you might find.

Once you decide on a loan type you will need to compare lenders. It is worth looking at their costs as they will vary and you do not want to pay more than you have to. However, cost is not the only thing you should be considering. The reputation of the lender might be important to you as well as their level of customer service but it is worth also making sure that you can afford the repayments.

Can I afford to repay?

With a payday loan you will often be expected to repay the whole loan and the interest in one lump sum. This is set up by a direct debit which comes out on the day that you are paid. This should help you to both remember to pay and have the money available but you still need to be wary. It is really important to make sure you repay it or else you will get charged extra.

As well as being able to pay for this, you also need to be able to afford the rest of your bills during the month. This could be tricky and could end up in you needing another loan to get you through. Therefore, you need a plan to make sure that you will be able to afford everything you need to pay for and the loan repayment. Cutting back on spending on unnecessary purchases might be enough, but for some people they may have to think about ways of earning more money as well. It is well worth getting a plan together before taking out the loan and then you will know whether the loan is a good idea for you or not.

There are a lot of things to consider and it is really important that you do. Rushing into a loan in a panic is a mistake that many people make. You need to try to calmly look at your options and make sure that you are well prepared for whatever decision you make and the consequences of that decision.

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