Store Card Information
Most store cards work like credit cards,
except that you can use them to pay for things only
in particular shops.
A few store cards are budget cards. With these, you
agree to pay a set amount each month, say, from £5
to £30. You can then, depending on the card, borrow
20, 24 or 30 times the amount of the monthly payment.
So, for example, if you agree to pay £20 a month,
you might be allowed to borrow up to 30 x £20
= £600 in total.
As a store cardholder, you may be eligible for special
perks, such as discounts and sale previews. But you
generally pay for these privileges because most store
cards charge a very high rate of interest. This makes
store cards one of the most expensive ways to borrow
and they are best avoided altogether.
Other shop credit
Sometimes you are offered interest-free credit –
especially when buying electrical goods such as a hi-fi,
TV or fridge. Check out the deal carefully. The credit
may be free, but could you buy the goods cheaper elsewhere?
How long is the interest-free period and what happens
at the end of it? Often the interest-free credit is
conditional on your paying back in full at the end of
the period. If you don’t, interest is charged
and backdated to the date of purchase.
Catalogue shopping
Shopping
from a mail-order catalogue can seem attractive if you’re
on a tight budget because you can usually spread the
payments over a large number of small instalments. That
helps your cash flow, but can work out expensive in
the long run with you paying much more than the cash
price. Also check that the catalogue prices are competitive
– you may be able to buy cheaper on the high street.
The Competition Commission reported on 14 September
2005 that store cards are costing us between £80m-
£100m more than we need pay, because of the generally
higher interest rates that these cards carry, but don’t
be too quick to condemn all store cards as basket cases.
The following cards offer rates that often compare very
well against credit cards
issued by the major banks – if you’ve got
one, we’d recommend you hang on to it:
Ikea 12.9%
John Lewis/Waitrose 13.0%
Fortnum and Mason 15.3%
Liberty 18.9%
Marks and Spencer &more 18.9%
But, if you’ve got one of the following
cards, we recommend you use our free credit
card finding service to find another and switch
the balance across to save significant money:
Argos 25.9% Habitat 29.0% Debenhams 29.9%
Austin Reed 26.8% Mothercare 29.0% Principles 29.9%
B&Q 27.0% Oasis 29.0% Country Casuals 30.7%
Jaeger 27.0% Frasercard 29.3% High & Mighty 30.7%
Bentalls 27.2% Burton 29.9% Kwik Fit 30.7%
Selfridges 27.6% Dorothy Perkins 29.9% Laura Ashley
30.7%
Harvey Nichols 28.5% Etam 29.9% Owen Owen 30.7%
Harrods 29.0% Evans 29.9% Creation 30.9%
BHS 29.0% Monsoon 29.9% Comet 31.9%
It’s worth the trouble – based
on average credit card rates,
most people can save £150 per annum for every
£1000 they switch away from expensive cards.
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