Advice

Is it right to buy New Clothes on a Store Card?

Many people have store cards, particularly for larger high street shops such as department stores. They can be something that shoppers will automatically turn to when they want to buy things in a particular store. If they want new clothes, for example they may just pop it on the card. But is this a good idea?

How do store cards work?

Store cards are rather like a credit card. You use them instead of cash to buy items in the store which issued the card. After approximately six weeks you will get a statement for the card, which will show everything that you have bought and how much it costs. You will get the option of paying off a minimum amount which will cover the interest on the card for the outstanding balance or you can pay off the full amount owed and pay no interest. You may also pay any amount in between the two, although the statements tend not to make that clear. So, if you repay everything that is owed by the date specified you will pay no extra, however, if you pay off some of what is owed, whether that is the minimum that they require or a bit more, you will be charged interest on the outstanding balance until it is repaid. Interest on store cards tends to be fairly high compared with other forms of lending.

Advantages of store cards

A store card can be very advantages, particularly if it is for a shop that you use regularly. You might be able to access to early sale previews or early previews of new season items. You may get discounts as well. What you actually gain will depend on the card issuer and it can be worth looking into this before you take out the card so that you are able to decide whether this is a good choice for you. Some store cards will also have rewards on them which could give you discounts.

Using a card can also be a very convenient way to shop. You will not have to spend too long paying and worrying about having enough money as you can use the card. You will have a credit limit, like you get with a credit card but it can still make it easier to buy things than with cash. You will also be given a credit limit so you will be able to spend up to a certain amount, this means that if you also have a credit card, rather than using that, you can use the store card and allow yourself to spend more money.

Disadvantages of store cards

If you use a store card to buy things that you would normally buy and pay it off in full, then they can be very good You will be able to take advantage of any offers that you get associated with the card and you will gain form it. However, some people do not use the cards like this.

Firstly, some people might buy more things than they normally would because they know that they do not have to pay for them right away. This will mean that they could get into trouble by not being able to afford this. Although they will only need to repay a small amount when their statement comes, they will pay interest on what they owe. If they leave that unpaid for a long time, they will end up paying lots of interest. It can be hard to see those costs building up because you will have to pay the interest each month and not pay very much off what you owe. It could mean that you will never seem to clear the card and if you keep spending on it then you may never pay it off at all and just keep paying that interest out all of the time.

So, whether it is a good idea to buy clothes on a store card will very much depend on you and how you use the card. If you use it for convenience and repay it each month then you will be able to take advantage of the card and not pay anything for it. However, if you spend a lot on it, do not monitor what you are spending and do not pay it off in full, then you could end up paying lots of interest which could be extremely expensive for you. Do make sure that if you do have a card that you use it sensibly. You will know whether this is something that you are likely to do or whether you are likely to get out of control and spend much more than you can afford to repay. It can be a good idea to only take out the card if you trust yourself and even if you do to carefully monitor your spending. Look up the balance online or write down what you are spending so that you know how much this is and you will be able to be confident that you can repay it. Once it gets too much, stop spending on it.

Budgeting

Should I give up Donating to Charity to Budget?

If you need to budget carefully and think about everything that you are spending you might feel worried that you have to give up donating to charity. It might be that you are trying to use all of your spare money to pay off a loan, increase your savings or just help you to manage to make ends meet. This might make you feel sad as you have obviously carefully chosen charities that you really care about and want to support and so you might feel bad that you will have to give up supporting them. It is important to think carefully then, about whether you can support them or not.

Be aware of budget

It is good to start by making yourself aware of how you need to budget. Look into your finances in a lot of detail and find out how much you get coming in each month and how much you have to pay out. You will then know what is left to spend on luxuries such as charity donations. If you have plenty left, then you might be able to donate to charity anyway, but this will depend on how much you donate and how much money you have left. It is really important to stay on top of your finances and know exactly what money you have coming in and what you need to spend on essentials so that you can be very careful in what else you are buying.

See if you can cut down elsewhere

It might be worth looking to see whether you can cut down in other areas so that you will still have enough money left to donate to the charities of your choice. It might be that you can go without your magazine subscription, a TV channel or cut down on your phone use so that you can still afford it. Of course, this will be a very individual thing and it will all depend on whether you actually have any luxuries that you will be able to cut down on. Do remember to compare prices on the necessities that you are buying as well because you could find that you will be able to pay less for them and that could save you some money.

Reduce what you spend but do not eliminate it

Another possibility is that you could still give some money to charity but just not as much as you normally do. Perhaps reduce the amount of charities that you are giving to or you can give less to each one. That way you will still be able to give to them all but you will not go above your budget while you are doing so.

Remember once you are better off you can give more

It is also worth remembering that you can always give more money again once you are better off. There will be a time when you are better off again and then you will be in a better position to help. In fact, it might be the case that if you stop giving anything now you might be in the position to give more sooner. That is because, if you need the money to repay a loan, the more quickly you can repay it, the less interest you can pay. That interest that you have saved, you could give to charity and you will also be able to start giving money as well once it is repaid.

Do other things for charity

Giving to charity is not always just about money. It might be that you will be able to volunteer or raise money for the charity without actually having to contribute money yourself. You could collect money, run an event or help them out with things. Sometime sit is actually more valuable for a charity to get help from people rather than just money. Obviously, it will depend on the charity that you support, as to whether you will be able to do this and the time that you have available.

Sometimes we just have to look after ourselves before giving money to charity. It can feel really hard, especially if we are used to giving a lot to charity, but we need to make sure that we have enough money to manage and to look after our family. There are other ways to give to charity and there will be other opportunities to do so, so you do not have to feel like you are abandoning the charity, just that you are putting things on hold for a while or changing the way that you are helping. Try not to feel too guilty about it, you do not want to end up needing help from a charity yourself because you have not managed your finances well. If you look after your finances and make sure that you are financially string you will then be in a much better position to help others.