The Pros and Cons of Store Cards
By Benedict Rohan We all love a bargain and when were faced with a store card offer at the sales counter as we make a purchase, the temptation can be difficult to resist. At face value store cards can seem appealing discounts on purchases, invitations to promotional and preview events, extra money off in the sales, and glossy member magazines and after all, theyre just another credit card, arent they? In fact, no, theyre not just another credit card. Although they may offer some tempting perks, they can be very expensive methods of borrowing that can lead to spiralling debt if the balance isnt paid at the end of the month. Theres no reason why you shouldnt open a store card account if youre sure its going to be an appropriate financial arrangement for you but you should weigh up all the pros and cons carefully before you make any decisions. Check interest rates and hidden fees: Lurking behind the fabulous special offers and discounts are various potential charges and fees that could send your debt soaring out of control. For a start, the interest rates can be more than double those of bank credit cards sometimes as much as 30% APR. And then theres the hidden charges, which can really catch you unawares. Watch out for penalties for late payments or for defaulting on payments. Some cards even charge interest from the purchase date if you dont clear the balance at the end of the month. Pay off the balance if you can: Why shouldnt you take advantage of the offers if theyre there for the taking? You could save a lot of money by opening a store card (for example, discounts of up to 20% may be offered with your first purchase), as long as you are sure that you will be able to pay the bill before interest is charged. Check what the bill period is its normally 30 to 50 days. Also find out whether theres an interest-free introductory period. Work out a budget: If you plan to spend a lot using the store card, work out a monthly budget of how much you will need to set aside to pay the bill, to determine whether you can afford it before you sign up to anything. Investigate other credit options: Store cards seem to easy to set up just completing a short form in front of a sales assistant wholl make a quick phone call to arrange it all for you but these days its really not difficult to obtain credit from a bank, and youll normally get better rates with a bank credit card than you would with a store card. Shop around before you make any decisions investigate what the banks have to offer. Dont be afraid to ask questions or say no: Sales assistants can be quite persistent theyre often on commission for the number of store card accounts that they open. Dont allow yourself to be bullied by them. Feel free to ask any questions and take as long as you want to mull over it. In fact, you dont need to sign on the spot take the forms and documentation away so that you can examine them in detail at home before making your decision. Dont go overboard: One store card might be tempting, but dont get carried away. The more store cards you have, the more difficult theyll be to manage and keep track of and thats when your debts can start to spiral out of your control. Author: Benedict RohanWebsite: www.mortgagenation.co.ukBenedict Rohan works as a freelance finance writer. Commercial Mortgage, Homeowner Loans, Remortgages Article Source: http://EzineArticles.com/?expert=Benedict_Rohan http://EzineArticles.com/?The-Pros-and-Cons-of-Store-Cards&id=373941 biopay paycheck secure wachovia unsecured loans paycheck calculagtor same day money loans
