|
It's
easy to be drawn in by a store card offer. You pick up items
take them to the tills and the cashier kindly offers you an
enticing discount if you opt for their handy piece of
plastic. The lure of 10% or more off an item can be very
difficult to resist and it makes perfect sense to jump on
the offer of 'something for nothing'. However, these cards
aren’t all they seem… and unless you're ultra savvy you'll
pay through the nose for your purchases.
Borrowing on a store card is a fast track to debt. The
average store card annual percentage rate (APR) is 24.6%
meaning a borrower paying the minimum 3% each month would
take nearly twelve years to pay more than £1,000 on an
initial £500 purchase! That's just the tip of the iceberg
however, with many store cards featuring rates in excess of
30%APR. For example, the Creation Account cards used by the
likes of JJB Sports, HMV, Carphone Warehouse and Sainsbury's
have a whopping 30.9%APR. So much for a discount!
Nevertheless store cards can still be enticing thanks to
their initial incentives, the likelihood of being accepted,
the convenience and the interest free period. If you're
considering a store card for any of these reasons then I
advise you to look at some viable alternatives:
-
Looking for an
initial incentive?
–
Try
the
Virgin Money Card.
With this card you receive large discounts on a host of
Virgin products including 10% off at Virgin Megastores,
10% off at Virgin Holidays, 10% off Virgin wines and 75%
off at Virgin Active. You will also
get
0% on balance transfers for twelve months and 0% on
purchases for three months
(typical APR 15.9%)
-
Looking to increase your chances
of being accepted?
–
Use our
Credit Card SmartSearch. Don't just opt for a high APR
because you don't think you'll be accepted for anything
better… find out what you're entitled to without hurting
your credit rating by using the SmartSearch facility
which will show you the best credit cards based on your
credit score without leaving a footprint
on
your credit file.
-
Looking for
convenience?
- OK nothing is more convenient than picking up a store
card and grabbing your discount immediately. However,
with more discounts and better rates elsewhere take a
complete search of the market
now to find
the right credit card for you - if you do this straight
away you could have your card in time for the January
sales and possibly even for the last minute Christmas
shopping.
As an
additional tip, store cards can still be useful if you use
your financial savvy. Pick up a card for an initial discount
but pay the debt off straight away. After that, simply cut
up your card or better still put it in a drawer until more
discounts become available!
|
