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.