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Store cards
What you need to know before you take them from friendly cashiers!
You’ve probably been offered a store card at some stage in your shopping life. You know the drill: the cashier smiles at you, maybe says something nice, than offers you a chance to get 'great savings' by signing up for a store card. (Unless it's Boots (especially the one on Shop Street in Galway), and they make you feel like that person who says they hate babies when you politely say 'no thanks' (end rant!).)
So when the cashiers conclude their butter us up schpeal by asking 'Would you like to sign up?', what's a shopper to say or do? Consider this info before you jump at the chance for 'mega savings' or shoot 'leave me alone or else' glares that rip their salesperson soul to shreds.
What are store cards?
- Store cards are like credit cards, except that instead of being used to make purchases in any shop, they are tired to a specific shop. So a store card from snazzyshoes can only be used at that shop and not at the shoe shop next door.
- Store cards are different from loyalty cards. Loyalty cards involve collecting points, which can be used towards discounted goods and services in store. They do not involving borrowing money. Store cards on the other hand are a form of credit and they do not involve collecting points.
- Store cards charge high rates of interest on purchases. So that €50 skirt could actually end up costing you €60.
Pros
- You can cash in on good sign up benefits. Shops usually offer enticing bargains when you sign up, so you can get good discounts.
- They offer good value if you tend to shop mainly at one shop and if you pay the balance in full every month.
- You can take advantage of members’ only events, such as late night openings or discounted purchases.
Cons
- Watch that interest rate rack up. Store cards tend to charge high interest rates, ranging from 25% to 30%. That adds up pretty quickly!
- They are often even more expensive than credit cards, yet they can only be used in one shop.
- They can lead to serious debt if you don’t watch what you are doing.
Tips for use
- Limit the amount of store cards you have. It may seem like easy spending, but having ten store cards is like having ten credit cards. It will quickly lead to debt and stress!
- Be sensible. Don’t use your store card for impulse purchases. Instead, use it as a way to save for items you really want or need.
- Watch out for the specials offers that try to lure you in. A 5% interest rate for the first month does not mean a 5% rate from then on. Read the small print!
- Bear in mind that sales assistants are often offered targets for the amount of people they sign up. So don’t assume that the friendly assistant is there to offer you balanced information on store cards.
