Credit and store card charges
Credit cards can be an expensive form of credit if you do not use them carefully. They can appear cheap by having a low interest rate but work out expensive if you wind up having to pay charges.
Even though Credit Cards can come in very useful when you are short of cash, they can also encourage you to get into some serious debt and you could incur some hefty charges if you are not good at sticking to a budget.
Changes to Charges
Since the beginning of August 2008 many credit card providers decided to increase their interest rates. This included higher interest rates or fees on purchases, cash withdrawals and balance transfers. Some credit card providers also cut the number of interest free days and/or increased the cost of using your credit card abroad. They justified this by saying that the risk of lending has increased over the past few months due to the recession and credit crunch and that they need to offset the increased risk posed to them. With regards to credit card balance transfers you need to check overall how much the interest charges will be on your current card compared to the cost of the balance transfer fees.
What is a Fair Credit Card Charge?
The charges which credit card companies impose has been a topic for discussion for quite a while and it has been asked how they can possibly justify the charges applied. It was raised that any charge over £12 would be investigated by the OFT (Office of Fair Trading) and due to this most lenders reduced their charges to £12. These are probably still too high but as any charge of this amount will not be investigated then they will not really look to reduce the charges further.
Interest Free Periods on Cash Advances
Always remember that when you take cash advances from your credit card or cash one of the cheques sent to you the interest free period does not apply, unless there happens to be a special promotion, and so interest will be charged from the date of the withdrawal, or cashing your cheque. You should also note that the interest rate will normally be higher for this activity being around 26% to 46% APR. Most credit card companies view online and offline bets placed with a credit card also as cash purchases and again the interest will be charged from the date that the bet was placed.You can request a rebate from your card supplier for all the excessive charges that you have been charged. Go to credit card refunds to learn more.
Credit Card Charge Refunds
You can request a rebate from your card supplier for all the excessive charges that you have been charged. Go to credit card refunds to learn more.
Store Cards have also been questioned as they often have very high interest rates and high charges if you are late or miss a payment.
One card which has been named and shamed was the Argos store card which was provided by Provident Financial who are a sub prime lender. The Argos Card was produced to target low income households and there were a number of options available with credit from £100 to £500 offered. However the maximum APR which you could be charged was 222.7% which should make you consider other options of credit first even if this does seem an easy application and offers fast acceptance. Upon checking the Argos Store Card today the typical APR advertised is now 27.9% when you spend £190 or more and you can pay 6 months later. If you spend £90 or more you can pay 3 months later, so it may be that they have re thought the card and decided to remove the high APR card previously advertised.
Quite often store cards are actually provided by sub prime lenders which may come as a surprise. Frequently when sold the cards terms and conditions are not fully explained. It is quite often the store assistants who offer the cards as they earn bonuses on the sales of store cards, though this does not mean that the terms and conditions are not outlined, they still should be.
You should also always be sent the terms and conditions by post if they are not provided in store, and you should have a "right to change your mind" period, though if you have already made a purchase this could become complicated and you may need to seek financial advice.
If you are careful you can use a store card to your advantage as often with the first purchase you do get a 10% discount. So if you were doing a big shop and didn't really want to pay for the goods for 20 to 30 days then this could actually work to your advantage. You should also consider whether paying for the goods with a cashback credit card rather than taking out a store card, would give you more of a bonus. However, in general, as long as you pay off the full amount before the stated due date and then dispose of the card you should see a benefit. You do have to be sure though that you have the will power to actually do this and of course that you have the funds to be able to clear the balance on time and in full. Also be aware that this application for credit will show on your credit check history and so if you know you want to apply for a different form of credit in the near future this might not be a good idea.
Stores that offer a store card Service
If you decide that a store card is for you and that the advantages that they provide apply to your financial situation there are a number of stores that offer the facility. Fashion stores that offer this facility include:
New Look Store Card
Burtons Store Card
Debenhams Store Card
Top Shop Store Card
Monsoon Store Card
River Island Store Card
Warehouse Store Card
BHS Store Card
Evans Store Card
French Connection Store Card
Miss Selfridge Store Card
It isn't only fashion stores that offer the facility there are a number of stores from Argos to Asda, Mothercare to Marks & Spencer and Ikea to John Lewis that provide store cards for their outlets. However, this is not an exhaustive list, so if after reading the information provided on this page you feel a store card could benefit your financial situation search around and find the best one for you.The links below will uncover further information and highlight other options.