Many major retailers offer a form of credit card called a store card, which you can only use with that particular shop or retail group.
Store cards can be useful and often come with tempting offers, but they can also be very expensive if you don’t pay off your bill on time and in full.
What is a store card?
A store card can offer a number of benefits for consumers, including:
- A discount off the price of your first store purchase
- Special events such as store card holder only evenings
- Store card points per purchase which can convert to in-store vouchers give you discounts on further purchases
Should I get a store card?
Store card interest rates are generally much higher than standard credit cards. When considering a store card you should take into account the Annual Percentage Rate (APR) and compare it with other forms of credit before you sign any agreement.
Shop assistants are often paid commission to sign customers up to their retailer’s store card, so don’t be pressured into signing up before you’ve looked through all the terms and conditions.
While your store card statement will specify a minimum payment, you should pay off the balance in full each month – if you only pay the minimum amount, the store card debt will increase and could take a long time to pay off.
I’ve got a store card – what can I do?
You could opt for a new credit card with a 0% balance transfer introductory rate and transfer your store card debt across to the new card.
One of the best 0% balance transfer deals around is the Barclaycard Platinum Extended Balance Transfer Visa card which offers 0% on balance transfers for 22 months (2.90% balance transfer fee applies) and a standard rate of 17.5% APR typical variable.
If you want a credit card with some of the perks of a store card but a better APR, try a reward credit card – every time you spend on a reward card you get something back in the form of points, which you can exchanged for discounts, gift vouchers or even flights.
The Tesco Bank Clubcard Credit Card gives you one Clubcard point for every per £4 spent on the card and 0% on purchase for up to 15 months (standard rate of 16.9% APR).
If you have a store card and have difficulty paying off your debts, get in touch with the issuer to make sure they know your situation, while organisations such as Citizens Advice can help you tackle your debts.