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Don’t Get Ripped Off By Store Cards

It is very easy to obtain a store card at just about every location when that store does offer a credit card to consumers. The offers may be made by the cashier and offer discounts on your purchases in addition to the convenience of shopping with a credit card at that store. In addition to being limited to where you shop, store cards carry a very high rate of interest if you are unable to pay off your outstanding balance before the expiry of the interest free period

If you already have several standard credit cards that are maxed to the limit, then obtaining a store card is not a viable option for you. It will only place greater financial strain on your already strapped resources and force you to make the minimum monthly payments on your account. With the high rates of interest charged on store cards, it will take you a very long time to pay off the amount you spend in this manner. Quite often the interest charged each month may be more than the required minimum payment, which will increase the amount of money that you owe. Even if it is lower than the payment, the difference is not likely to be very much

You need to exercise caution is this is the manner in which you plan to fund your Christmas expenses, Store cards charged higher than normal rates of interest, which makes it harder to pay them off in full within a reasonable time frame. Despite investigations into the exorbitant rates by the Competition Commission, the stores that offer such credit cards still haven’t lowered their interest rates. When you receive your store card statement, take note of the amount of interest charged on your purchases for the month and compare it to the minimum payment required. There is probably such a small difference in the two amounts that you will be paying next to nothing on the outstanding balance of your account.

With the Christmas season just around the corner, it is a very good possibility that many consumers are planning to use their store cards for their Christmas shopping. If this is the case with you, you should prepare a budget for this purpose so that you won’t overspend and get yourself into financial difficulty being unable to repay the balance on the card in full. Plan your shopping experience so that you know what you want to buy and how much you can afford to spend this Christmas season

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.

In order for a store card to be effective in helping you get over the added expense of Christmas, you should prepare a budget of how much you can afford to spend at this time of the year. Then when the statement comes in during January, you will not receive a shock at how much you have actually spent and then become stressed about how you are going to pay off the balance on the card.

Article Source: http://www.articleadventure.com

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 low rate credit cards for UK residents and also a great selection of free credit cards. Visit today to read more of Alisdair's great credit card articles.

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