Stores are often trying to encourage us to take out their store cards. You may wonder whether it is a good idea to take one out though or whether it might be better to avoid them. Many of us already have a lot of cards, so getting extra could just feel like more to carry, but there could be benefits so it is worth considering whether it is good to get one.

What is a Store Card?

A store card should not be confused with a loyalty card, it is very different. A store card is like a credit card and you will be able to use it to buy items without having to pay for them immediately. Like a credit card, you will get a monthly statement where you will be required to repay a minimum amount which will usually cover just the interest or costs and a small amount of the outstanding balance. There is also the option to repay it all or anything in between.

What are the Benefits?

The card will therefore allow you to have a bit of interest free credit, between the time you buy the item and the statement comes. This means that if you cannot afford the items right now, then you can pay for them a bit later. You can even wait longer and pay for them a lot longer into the future if you want to.

You will find that store cards have offers with them as well at times. For example, you may find that you can have a discount off shopping when you first take out a card and therefore you will be able to shop for a week or so and get money off each purchase. Or you may find that you get early access to sale prices or other discounts. The benefits will vary between shops and so it is worth investigating what these are. You may find that it is better to go for cards form certain shops rather than others.

What to Watch out for

It is wise to be well aware of what the interest rate is on the card. You will find that the cards will have a pretty high rate compared to other borrowing and you need to think about whether you think that this is worth it. If you plan on paying the card off in full and just using the card to take advantage of the offers, then this is fine, but you will need to make sure that you are not buying more from that shop just because you have a card and a discount and you find that you are actually buying things that you do not really need just because you have the card.

You may find that the store you have the card for tends to start being your go to shop because you have the card. Watch out for this because it may be the case that this shop is not that cheap and that if you compare prices you might find the same items sold elsewhere for less money. If you are not careful you could end up paying more than you need to for the items.

It is worth making sure that this card really is better than a general credit card, for example. You will be restricted in where you can use this card as it is likely that you will only be able to use it in the one shop. However, with a general credit card it will normally be accepted anywhere. It is also wise to think about the fact that you may be able to get cash back or other benefit with a general credit card which might be better than the ones one a store card so make sure that you compare them before you sign up.

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