Don't Get Ripped Off By Store Cards

By Author: Alisdair Cosgrove
Total Articles: 184
Comment this article

With the Christmas season fast approaching, it is more important than ever to try to avoid using store cards wherever possible. This is because of the tendency to overspend when you enter the store for which you have a credit card and see something that really strikes your fancy. So many people turn to credit cards to help ease the financial crunch associated with buying Christmas gifts for family and friends and delaying the inevitable of paying for these purchases until the start of the. The reality of spending too much on store cards sinks in when you get your statement in January.

Store cards are easy to obtain, especially now that the credit card companies are approving fewer applications. There is no doubt that thousands of consumers are planning to use their store cards to make the purchases they need for Christmas this year to help ease their financial burden over the holidays. The problem with using such a card for this reason makes itself known in January when the first statement appears. The interest charged on the purchases you make may be more than the minimum payment required, which means it will take you ...
... a very long time indeed to pay off this account

Using a store card can be advantageous, but only if you are able to pay the outstanding balance in full before the interest free period of the statement expires. In this way, you will realize the savings on discounted purchases you made at the store. If you have to make minimum monthly payments, the savings you did realize on the items you bought will be wiped out in the first month. Plus, the cost of the items will be spread out over the number of months it takes you to pay the balance in full, which makes them much more expensive than you first thought. According to a recent report, if you only make the minimum payment on your balance of the store card, you could be paying double for your purchases

Another of the pitfalls of using store cards is that when you have such a card you are more likely to visit that store more often and when you see an item you would like to have then you can readily buy it. It is very enticing to consumers to be able to shop in this manner and this is what has caused so many to find themselves in financial difficulty. They may not have the financial means to repay the full balance at the end of the month, which means they have no other option but to make the minimum payment

When you allow the interest charges to build up on the purchases you made using a store card, it doesn't make any difference whether or not you paid less for the item than you would have at another location. The interest on the balance will wipe out any discounts your received. Paying the monthly payments on the account will actually mean that the items you bought were more expensive when the interest is added to them over time.

If a store card is the only way you will be able to manage your Christmas shopping this year, prepare a budget for the amount that you can afford to spend and pay off before the statement due date. In this way, you can benefit from using the card and avoid the pitfalls associated with it
Alisdair Cosgrove has been writing finance articles for many years and can find more of his work at the UK site CreditCardsWeb.co.uk, offering credit card deals for UK residents and also a great selection of interest free credit. Visit today to read more of Alisdair's great credit card articles.