Should I get a store card?

fan of plastic cards

fan of plastic cardsI was buying some clothes at the weekend and was offered a discount on my shopping if I took out the retailer’s store card. It sounded like a good deal. Should I have signed up?

Many of the big high-street names now issue their own store cards – and they often tempt new customers with discounts on their purchases. The cards are just like credit cards, except you can usually only use them to pay for goods in one store or chain, Mothercare or Topshop, for example.

Store cards are also typically more expensive than credit cards. Interest rates can be as high as 30% in some cases, compared with about 18% on standard credit cards. And store cards don’t usually come with ay 0% offers.

So, I am not a big fan. But that doesn’t mean you should spurn the offer of a discount.

Store cards are a potential debt disaster only if you use them to borrow money. If you clear the balance in full and on time every month, you shouldn’t have to pay a penny in interest. In other words, the discount will only cost the time it takes to complete the application form.

So next time you are at the checkout and the cashier suggests the store card, grab the discount – as long as you can afford to pay for your purchases in full when the statement arrives.

Naomi Caine was editor of The Sunday Times Money section for six years before she moved out of London to bring up a young family. She now juggles two children with a freelance career, and has written for a variety of publications, including MSN, Yahoo, The Times, The Sunday Times, Which? Money, Money Week and The Sunday Herald.

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