Recent reports have all pointed to the fact that many consumers are turning to store charge cards in a bid to try and ease the financial strains of the expensive Christmas period. Of course, over the festive season an increased number of consumers find themselves being talked into taking out a store card, and this is relative to the increase in the number of people hitting the shops during this period. However, this year could see an unusually high number of consumers turning to store charge cards for their Christmas shopping. Why? Because of the difficulties in getting a standard credit card as a result of the global credit crunch.
With the effects of the credit crunch taking their toll in every financial sector more and more people are struggling to get a credit card for their Christmas spending. With so many people being so reliant on credit to fund their Christmas spending, the fact that credit card companies are turning an increasing number of applicants away has come as a real blow to many. This is one of the reasons why many consumers are having to turn to store cards as a last resort, having arranged no back up plan in the event that they would be unable to get a credit card.
However, if this is something that you are planning as a back up to not being able to get a credit card then you do need to be exercise caution. Store charge cards have been linked to extortionate rates of interest for many years, and despite an investigation by the Competition Commission interest rates on these cards are still sky high. A recent report has shown that if you make purchases on a store card and then repay the minimum amount each month you could actually end up paying double the value of the item that you bought simply because of the interest charged.
Anyone that is planning to take out a store card to help them out over the festive period is strongly advised to make sure that the balance is paid off in full before interest is charged, as otherwise any discount that was offered when the card was taken out will be more than compensated for by the amount of interest charged. In addition, you will pay far more for the purchases that you have made because of the interest that will be applied to the balance.
