Debt Support Line > Blog > Finances > Store cards – should we be using them?

Getting a store card from your favourite retailer may seem like a great idea at the time but what your shop assistant won’t highlight is that these cards are a form of debt. Different to a loyalty card where you accumulate points, the use of store cards means you are purchasing using credit with an interest rate almost always attached.

Ideally, the best way to use a store card is to sign up, use the introductory discounts and then pay off the card so you’re avoiding all the interest. Many retailers offer a % discount on your first purchase or purchases over a certain amount. This is usually what entices people to take them on.

Store cards work very much like a credit card but you can only use them in one store. “Around two-thirds of the major store cards in the market charge over 25% interest” (moneysavingexpert.com). This is a lot more than any standard credit card. They are also often targeted at young shoppers. Stores such as New Look and Topshop have a younger footfall and this type of shopper doesn’t always have the knowledge of the consequences of these cards and their interest rates.

Advice from moneysavingexpert.com is that if you have a store card balance, you should use a 0% balance transfer credit card to pay it off before the 0% ends. Most store cards won’t offer any interest-free periods which is why this is recommended.

“The average Briton now owes £432 across 3 store credit cards or accounts” (express.co.uk). 

If you’re not careful, store cards can spiral out of control but they can be managed as long as you have all the knowledge available on how to use them effectively. If you’ve found yourself in a bit of bother with store cards, contact us today to see how we can help. Get in touch with us today on 0141 380 0588. 

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