How to Repay my Store Card

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If you have a store card then it is a good idea to think carefully about how you are going to repay it. You will have different repayment options and it is good to think about these as well as working out how you will afford to repay it.

Repayment Options

It is worth being aware that there are different options for repaying your store card. You will find that you get a statement every month and you will have to repay a minimum amount. This will be enough to cover the interest and charges on the card and a small amount of what you owe. You have to pay at least this amount but you can pay more. If you repay everything that you owe on the card then there will normally be no charges and certainly no interest to pay. Therefore paying off everything you owe can be the best option and you can set up an automatic payment to do this if you wish to. However, you may prefer to repay just the minimum or a bit more than this. It is your choice, but it is worth making sure that you are aware of the costs of this and how these costs could add up if you decide to take this option.

Benefits of Tracking Spending

It can be well worth making sure that you track how much money you are spending on your store card. This is because it will allow you to be able to ensure that you are able to repay it. If you keep spending on it and do not know how much you are spending then it could mean that your debt will accumulate and you will not be in control. You could end up finding that you will not be able to repay it. If you want to repay it in full each month then you will need to make sure that you will be able to afford it. So, if you note down what you are spending then you will be able to more easily check whether you can afford to repay the card. Even if you decide that you are not going to repay it in full, you still need to think about that debt and whether you will be able to manage it as well as the amount of interest that you will be being charged.

Ways to Guarantee you can Repay

As well as tracking what you are spending, you need to think about ways to ensure that you will be able to afford to repay the card. It can be a good idea to put together a household budget. Work out how much you have coming in each month and how much you have to spend on necessities, tax, insurance, rent, bills etc and then calculate what is left. This is the amount that you can afford to spend on your card but you need to allow for the fact that you might want to buy things form other shops as well. It could therefore be wise to set yourself a budget for your card spending. Then either note down how much you are spending or check the balance from time to time and that will enable you to make sure that you stay in control of what you are spending. You will then have no reason to worry about whether you will be able to repay the card when you need to. You may even be wise to think about cutting back elsewhere or thinking of ways to earn a bit more money, so that you are confident that you will definitely have enough.

Is a Store Card Better than a Credit Card?

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It can be a good idea to compare a store card with a credit card. This is because they tend to be very similar in the way that they work but there are also some differences that you should consider as well.

Similarities

  • Both a credit card and a store card will give you some interest free credit. You will be able to use the card to pay for things and will not be charged any interest on what you have bought until a certain date. You will get a statement through which will tell you how much you need to pay and by when, in order to pay no interest at all.
  • Both cards will allow you to delay repaying everything that you owe. You will need to repay a minimum amount of money and this will cover the interest and perhaps a little of the balance as well. However, with both cards, if you just pay this much each month, you will take a long time to repay the card.

Differences

  • With a store card you will only be able to use it in a particular store or set of stores. This means that you will not be able to use it for most things that you buy, but just from specific retailers. With a credit card you will be able to use it in most stores.
  • The interest rate can vary but it is often the case that a store card will be more expensive than a credit card. However, you will need to keep a check on the rates to be sure.
  • A store card may have rewards for the store – perhaps discounts, preview sale access or things like this. Some credit cards will also offer rewards as well such as air miles or cash back.

It is worth comparing these things and think about what will work for you. You might prefer the flexibility of a credit card, that you can use it in lots of stores but you may rather have discounts in the stores that you really like. You may also want to go for the cheapest card and so you will need to compare them to find this out.

Some people might choose to have a store card and a credit card. This is something which will mean that you can take advantage of both. However, there is a risk with this that because you have more credit available to you, that you could end up spending more money than you can afford to repay. If you like to repay in full, then you might need to make sure that you keep a note of what you are spending on each card to ensure that you will be able to afford to repay. It is always wise to use online banking to keep regularly looking at how much you owe to make sure that you can afford to repay it, but if you have lots of cards, this can become more time consuming and trickier to remember to do.

Some people may also find that if they have a store card which has a discount, that they use it as an excuse to spend lots of money in their favourite shop. They should not do this because they will end up spending more than they can afford or buying more things than they actually need. Therefore, it is a good idea to think hard about whether this is something that you want to risk or whether you think that it is not something that will happen to you.