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Beware the Shopping Mall Monster
Like me, you've probably been offered a fair old number of
these by now...
..and, if you're like most people, chances are you maybe own
at least one or two.
They always seem to put in an appearance at just the right (or
wrong) moment...
It might be Saturday and you've just seen the clothing item of
your dreams.
That can be a pain, though, if this month's paycheck isn't due
for another week.
You're undecided.
Until, that is, you're offered...
..a store card.
One of the horrible ironies about store cards is that the vast
majority of people who sign up for one actually had no intention
of making a purchase before they left the house.
But if you're caught in the above situation, the convenience
factor frequently wins the day, doesn't it? Add on top of this
all the little goodies thrown in as a sweetener...
An introductory discount on goods - typically around the 10%
mark - extra money off during sales periods etc...
But let me tell you what the sales assistant probably
won't...
For starters, did you know that many department stores will
currently charge you anything up to 30% interest on that little
card they offer you? (yes, even those ones with the pretty
pictures.) That's around double the interest of your standard
credit card!
Sound scandalous?
Well, hang around... it gets a lot worse!
Here are just a few of the pitfalls you should look out for
the next time you're offered a store card...
- Buy now, pay within the next three months. Sure...great
deal if you do actually manage to pay it off within that time.
If not, some stores will charge you interest from the first day
you bought!
- Ask questions: In a recent study, it was found that in one
third of cases, information on the interest rate on the card
(among other things) was not freely available.
- Don't be tempted to take out expensive and often useless
insurance. This can be a monthly amount of 1.5%. With interest
repayments of 30%, you could end up with an annual rate of
56%!
- Also, steer clear of any payment protection insurance
scheme. If you were to lose your job or couldn't work due to
illness or accident, you'll find that this 'insurance'
generally only pays the minimum monthly payment, not the whole
balance!
- Be on your guard. Staff will usually ask you to fill in the
application form in store. In many cases the insurance box will
already have been ticked and you will simply be asked to sign
up for insurance.
- Study the terms and conditions carefully in the store.
Staff have been known to refuse customers to take away the
form.
Probably the worst thing about store cards is that it's very
easy to build up an array of them so that, before you know it,
there seems to be more of them in your wallet than there are coat
hangars in your wardrobe.
And in what seems like no time at all...
.. you've just spent way, way beyond your means!
If you feel you must buy on credit why not use a credit card
with a low or even 0% rate? After all, if you're going to have
debts, you may as well make them cheap ones!
A store card might seem handy and convenient but they
generally come with a horrendous hidden cost.
So next time you're a tempted to take on another piece of
plastic, make sure you get all the facts up front.
Your bank balance might just thank you for it.
Copyright © 2004 by Colin McCaig mailto:colin@cmcaig.com
About The Author
Colin Mc Caig is dedicated to helping others become debt free
and start their own home-based business. Get his free 6-part
mini-course. Learn the powerful secrets to becoming debt-free
using only the money you have today. Send a blank email to:
mailto:colindebtfre@demandmail.com
MORE RESOURCES:
MORE COLLEGE CREDITChicago Sun-Times, United States - 11 hours agoDespite the current nationwide credit crunch, the State of Illinois secured $100 million for the student loans by tapping a new source -- credit unions. ... |
Ask, and you might receive a lower credit-card rateSeattle Times, United States - 15 minutes agoPick up the phone, look at the latest credit-card offers and keep repeating this: The bank needs me more than I need it. By Susan Tompor Pick up the phone, ... |
Boston Globe |
US travelers face credit snafuBoston Globe, United States - 13 minutes agoBy Eric Lucas All I wanted to do was buy gas, so I put my credit card in the automatic card-reader and got ready to fill the tank. ... |
Credit - Google News
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