Store cards: are they worth it?

24 January 2012

Retailers will no longer be able to push store cards based on discounts at the till, following an agreement between the British Retail Consortium and the Finance and Leasing Association.

Instead, store cards will have to be sold to customers based on their lending terms and the rates they offer. Cardholders will then be able to take advantage of discounts and special offers after seven days - and not straight away as they can under current rules.

The thinking behind this decision, which comes into effect from the end of March 2012, is that it will force retailers to take a more responsible approach when promoting these cards and ensure shoppers don’t find themselves unwittingly saddled with debt.
With the allure of instant discounts gone, is there any point in taking out a store card? We list the main pros and cons.



From the end of March next year, you won’t be able to use any discounts on purchases until seven days after you’ve opened the store card, but after that you can still take advantage - and who doesn’t like 10% or 20% shaved off their shopping bill?

Exclusive offers

Cardholders can receive email and postal updates informing them of store promotions and exclusive offers for store card customers only.

Useful if you’re short of cash

Provided you pay off the card balance within the interest-free period - usually around the 50-day mark - store cards can be useful when cashflow is tight.


Promote a reckless approach to spending

The danger with store cards is even if you intend to pay off any money owed before interest is charged, it’s all too easy to forget and find yourself paying more.

High APRs

Percentage rates on store cards also tend to be higher than credit cards. Take the New Look and Argos store cards, for example, which charge 28.9% and 29.9% APR respectively.

Late payment charges

Making late payments results in a double hit: as well as being charged interest if you go over the 50-day credit free period, you will also face steep late payment fees. As a guideline, both Argos and New Look charge £12 for tardy payments.


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