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What are Store Cards & How Do They Work?

By: Christine Whitfield BA (hons) - Updated: 26 Sep 2012 | comments*Discuss
Store Card Loaylty Scheme Point Store

Most people have at some point owned a store card. It is a little too easy isn’t it? You’re standing at the checkout knowing you probably can’t afford these boots really and you should put them back and wait until you’ve got a bit more money. Then the cashier tells you can take them away without paying today if you take out a store card. And better yet you can actually buy even more stuff! Who would say no to that? Well all is not as it seems. You see you may not pay on the day but you could end up paying a lot more once your store card bill comes in!

How Do I Get a Store Card?

Getting a store card is easy. In most stores when you go to make a purchase you will be informed of any store card on offer. If you want to get one you simply have to fill in a form and you start using the card there and then. Most stores even offer a discount on the purchase as an incentive for taking the card out.

How Do Store Cards Work?

Store cards work in much the same way as credit cards. Most will have a set limit and you can spend in store until you reach that limit. Also, like credit cards, you will receive a bill each month showing what you have bought and how much you owe, including interest. You can then pay off the whole bill or just pay the minimum amount, much like with a credit card.

What Benefits Are There?

There are obvious benefits for store cards. You get to buy things on the card when you may not have the cash available to do so – when you don’t get paid for a few days for example. With most cards you will be notified of any deals in the store before other customers and you may receive discounts.If you pay off your store card every month you should be able to manage the card just fine, the problem is not everyone does.

What Problems Are There?

The biggest problem with store cards is the interest that is charged on your purchased. Interest on store cards is often much more than credit cards. And if you consider that if you’d waiting until you had the money and paid in cash you wouldn’t have to pay any interest at all that’s pretty much a waste of money!

Store cards are handy as long as you pay off the balance each month. If you see it has free money that you won’t have to pay back you will find yourself getting into trouble. Don’t take out more than one store card and make sure you only use it to buy what you will be able to afford when you’re wages come in etc. The money has to be paid back so if you’re not going to have the money soon then you shouldn’t make the purchase.

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