What to Think About Before Getting a Store Card

Have you ever thought about how much money you’ve spent on impulse purchases in your lifetime? Have you thought about what you could be doing with that money now?

This is a question that Shafeeqah Isaacs thinks about when she considers the years she spent paying off her store card debt. Her student days were filled with impulse purchases of items that she stopped caring about almost as soon as they landed in the cupboard, and as a result most of her first salary went to paying these debts off.

It’s easy to get caught up in the instant gratification of a new dress or killer sneakers, but each new purchase adds to the amount you’ll ultimately need to repay. If this amount goes unchecked it could turn into an overwhelming financial mess that you might feel like you’ll never overcome.

Shafeeqah worked her way out of her store card debt, and these days she spends her money on experiences that enrich her life, not things that she’ll forget as soon as she gets home. Her experience has taught her to be more careful with this kind of spending.

Here are some things that Shafeeqah wants South Africans to think about before they sign up for a store card:

1. Some stores charge card maintenance fees, initiation fees and compulsory card protection insurance which you will have to pay on top of your interest charges.
2. Store card rewards require significant spending on your behalf in order to earn enough points for meaningful discounts or returns, which means you might end up spending more than you planned in the hopes of earning more.
3. ‘Zero interest intro periods seem like a great way to spend and pay back exactly that amount, but it’s easier said than done. Additionally, if you don’t manage to pay back the amount you loaned within the intro period, you may have to pay interest on the whole amount from when you signed up.
4. Consider where you’re signing up for a store card. Is it worth going into debt to buy things that you might not like in a few months’ time?

Not all store cards are a bad idea, and many people use them as a starting point to building their credit score. But it’s always a good idea to know your financial limits before signing up for one. Spending wisely means you’re saving wisely.

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