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Steer Well Clear Of Store Credit Cards - Get These Good Ones Instead

September 2005

Talk about a job for the boys. Its taken 18 months and nearly £2 million for the Competition Commission to come up with this radical conclusion -

Store credit cards offer incredible bad value for consumers

Realise that this finding is so obvious that anyone with experience in Personal Finance could have told them and proved this fact with a 5 minute meeting.

The Commission proposes several measures to give holders of store cards a better deal but we've been hearing talk similar to this from government sponsored agencies for over 5 years now. Nothing ever happens and little will happen because the banks control this racket and they're often too powerful with many paid for friends in the highest places - or if these friends aren't paid yet, they're hoping for directorships or other cushy jobs in the future.

Store Cards - A Plan of Attack

  1. Don't sign up for them unless there's a very good deal attached such as 5% off all purchases using the card etc
  2. But then only ever apply if you can FULLY pay off the debt at the end of EVERY month (APR is around 29.9% on most store cards!)
  3. If you do want to use credit then forget about store cards forever and instead get a credit card that's far cheaper to borrow with

There Are However a Few Good Store Cards

  • The John Lewis Partnership card offers credit at 14% which is not bad but borrows can do better (this card also has a good rewards program offering vouchers to spend at J.Lewis/Waitrose)
  • Ikea offers a store card at around 11.9% (but again this APR can be beaten)

So Which Credit Cards Are Good

This all depends on what you want the card for.

Some people pay off their balances every month and therefore should look towards Reward or Cashback style cards. Others borrow so should try and get the lowest APR possible, and others look to transfer balances from other cards so as to take advantage of so called zero % transfer offers.

Also Look at this card for Cashback

  • Morgan Stanley Platinum
  • Pays 1% on the first £2,000 (pa) and then 0.5% thereafter
  • A special promo is often run on this card offering a '6 Months Double Cashback'
  • Click for more details on this card

Summary

  • Forget Store Credit Cards unless they offer some sort of great deal AND you can pay back the credit EVERY month without FAIL
  • Instead, do a touch of simple homework (see above) and get the best credit card for your needs

See Also


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