Money tips: Should I use a store card or credit card this Christmas?
Whether we’ve been frugal or flashing the cash throughout the year, Christmas is the time many of us let go of the purse strings for a few weeks – which means a bit of smart financial advice in advance can be handy.
There are numerous options when it comes to funding a festive splurge – and many things to consider before hitting the stores for a bit of retail therapy. One of the ways that many high street shops encourage us to part with our cash is through tempting store card offers.
These pieces of plastic draw shoppers in with impressive introductory offers of a 10, 20 or even 30 per cent discount on the final bill. In many cases, consumers don’t go into a store with the intention of buying items on a store card – and walk out the door with one after the hard sell at the counter.
However, the interest rates can be extremely uncompetitive compared to credit cards – read the small print and you’ll realise you could be paying up to 30 per cent interest. Miss a repayment or forget about the card and that saving could be far outweighed by the interest.
That’s not to say that using store cards can’t be a savvy way to shop
If you’re good with money and organised, they can lead to big savings. The trick is to take advantage of the introductory discounts, pay off the balance immediately, then close the account.
Of course, at Christmas it’s easy to lose sight of what you’ve spent and where, meaning a credit card could be a better option. Although you may not make as big a saving on purchases, if you go for a zero per cent deal, you won’t be paying large interest on your monthly bill. Keep an eye out for cashback credit cards – if you’re planning to make many purchases from the same superstore or supermarket, many products offer a flat discount on all purchases within that store.
Once again, being disorganised is one of the biggest dangers with a credit card – as with any financial product, the key is to be realistic about what you can afford and how you plan to pay your borrowings back.
If you’re determined to stay in the black at Christmas, one of the best ways is to save throughout the year and spend only from this pot of money. Spending on a debit card may not give you impressive discounts – and in cases where the item is large, adequate financial protection – but it can be one way to ensure that you’re not pay for your festive purchases well into next summer.