With the Christmas season fast approaching, it is more important than ever to try to avoid using store cards wherever possible. This is because of the tendency to overspend when you enter the store for which you have a credit card and see something that really strikes your fancy. So many people turn to credit cards to help ease the financial crunch associated with buying Christmas gifts for family and friends and delaying the inevitable of paying for these purchases until the start of the. The reality of spending too much on store cards sinks in when you get your statement in January.
If you already have several standard credit cards that are maxed to the limit, then obtaining a store card is not a viable option for you. It will only place greater financial strain on your already strapped resources and force you to make the minimum monthly payments on your account. With the high rates of interest charged on store cards, it will take you a very long time to pay off the amount you spend in this manner. Quite often the interest charged each month may be more than the required minimum payment, which will increase the amount of money that you owe. Even if it is lower than the payment, the difference is not likely to be very much.
In order to avoid paying away most of your money on interest payments when you have an outstanding balance that you cannot pay off before the end of the interest free period, you should set a budget of how much money you can afford to spend this Christmas season. It is not just the cost of the gifts that you have to factor into this budget because Christmas means more food and clothing for entertaining guests as well as decorations for your home. Instead of just wandering around the store purchasing everything that catches your eye, plan your shopping experience based on the discounted items and the specific items you want to buy.
Another of the pitfalls of using store cards is that when you have such a card you are more likely to visit that store more often and when you see an item you would like to have then you can readily buy it. It is very enticing to consumers to be able to shop in this manner and this is what has caused so many to find themselves in financial difficulty. They may not have the financial means to repay the full balance at the end of the month, which means they have no other option but to make the minimum payment.
When you allow the interest charges to build up on the purchases you made using a store card, it doesn’t make any difference whether or not you paid less for the item than you would have at another location. The interest on the balance will wipe out any discounts your received. Paying the monthly payments on the account will actually mean that the items you bought were more expensive when the interest is added to them over time.
Store cards have their advantages and disadvantages. You should carefully weight your options before you start using one of these credit cards. They can help you with the added expense of Christmas but you have to know where the money is coming from to pay the balance of the card after the Christmas season is over and you are into the New Year.
Alisdair Cosgrove has been writing credit card hints and tips for many years and can find more of his work at the UK site www.CreditCardsBureau.co.uk, offering
interest free credit cards for UK residents and also a great selection of
rewards credit cards.
