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We’ve all been there – you finally make it to the till after perusing the store only to be bombarded with questions by the sales assistant. Do you want a bag? Would you like to sign up to our newsletter, or hear about the benefits of our store card? It’s that last question that can become more tempting in the run up to the festive season – but before you answer, there are a few things you should know.

What exactly is a store card?

Store cards work like credit cards but can only be used in a specific store or group. Store cards are not loyalty cards, they allow you to buy things on credit and pay your bill off at the end of the month, but you don’t receive any sort of loyalty points from them.

They shouldn’t be confused with store-branded credit cards either. Companies like Sainsbury, Asda, Tesco, Marks & Spencer and John Lewis all have these and they usually come with loyalty schemes attached to them, like Tesco’s Clubcard points.

Store cards generally offer discounts, making them attractive to customers that shop with the store often. The discounts either come as an introductory or occasional offer (typically between 10% and 20% off) or are substituted by money-off vouchers, but you’ll usually have to wait seven days before you access these. Some store cards have special events just for store card holders as well.

Be aware

One of the major downfalls of store cards is that they come with fairly high interest rates, often between 25% and 30%. Because of this, it’s important that you try to clear your whole balance each month so that you don’t pay any interest. If you are only able to make the minimum payment each month then your balance could take many months to clear and the interest you will pay will far outweigh the original discount.

As we’ve said before, you’ll probably be introduced to a store card through a sales assistant. If you’re ever unsure of something that they say, make sure you ask further questions and if they’re unable to answer you, speak to their manager who should be able to give you more information.

Before you sign up

Make sure you read the information about the store card carefully, reading over what the interest rates are and the type of discounts you’ll get. If you’re feeling pressured to sign up in store, ask to take a leaflet away (if they have one) so that you can weigh up your options in your own time. Remember that if you do decide to sign up you’ll have a 14 day cooling off period to change your mind.

Alternatives to store cards

If think you won’t clear your balance immediately but will pay it back over a number of months you might be better off with a 0% APR, or low rate, credit card (one designed for spending, not balance transfers) rather than a store card. Some of these offer a 0% interest free period for as much as 26 months. As long as you’re making at least the minimum monthly payment during this time you won’t be charged any interest on what you spend.

After this time, interest rates can jump up so make sure you clear the card before the end of the interest free (or low interest) period. Remember too that if you miss a payment, pay less than the minimum, or pay late, you may incur extra charges and you may have the 0% concession removed and start to have to pay interest.

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