What is a store card?
Your credit record is affected when you apply for a store card, store credit card or standard credit card.
It is a type of credit card that only lets you spend money at a particular retail shop, or retail chain. Some store cards also offer money off your first purchase.
You get charged interest on what you spend, and can pay off your balance over a term that suits you.
Argos store card: Benefits include - Buy now pay later scheme, either over 3 months or 6 months.
Next store card: Benefits include - Get £10 off your first purchase, 0% on purchases for first 3 months and 3 months free next day delivery.
Card benefits correct as of 16th October, 2017.
What is a store branded credit card?
It is a credit card associated with a particular store, for example John Lewis.
This type of card lets you spend anywhere, and can offer you better incentives to shop than traditional store cards.
What incentives could you get?
The benefits you could get vary depending on the card you apply for. Here are some examples:
Money off your purchase: This could be a set amount, or a percentage of your spend taken off your bill, however it usually only applies to your first purchase.
Pay nothing back at first: Save on repayments for the first few month, then start paying back the balance with interest.
Loyalty points: Build up points by spending, and exchange them for money off another purchase in the future.
However, these cards charge you a higher interest rate compared to standard credit cards, making them an expensive way to spend.
Here are some of the store credit cards found across the UK high street:
John Lewis store card: Benefits include - Get £5 John Lewis/Waitrose voucher for earning 500 points. Earn 1 point for every £1 spent at John Lewis/Waitrose, or 1 point for every £2 spent anywhere else.
Debenhams store card: Benefits include - Get 500 points and 10% off during the first week. Earn 3 points for every £1 spent at Debenhams, or 1 point for every £2 spent anywhere else.
Card benefits correct as of 16th October, 2017.
Is there a cheaper alternative?
You could apply for a 0% purchase credit card, which does not charge interest on what you spend for a set term, e.g. 0% on any purchases made in the first 12 months.
You only need to pay off a small amount off each month, called the minimum payment. This is usually a small percentage of your remaining balance, e.g. 2%.
When the 0% term ends, you will pay interest on any outstanding balance. The 0% term on a purchases credit card is likely to be longer than what a store credit card could offer.
Unlike a store card, a 0% credit card lets you spend with any retailer online or on the high street, making shopping on one card simpler.
It is when you transfer an existing credit card balance to another, or new, credit card.
You can find credit cards that offer 0% on balance transfers, as well as 0% on purchases. This means you could pay no interest on the balance you transfer across.
Using a balance transfer could save you money if you are paying interest on another credit card.
