CREDIT FA­CIL­ITY

CityPress - - Business And Tenders & Auctions -

Pick n Pay is launch­ing a credit fa­cil­ity that can be ac­cessed through your ex­ist­ing Smart Shop­per card, which gives you up to 55 days to pay back the money you bor­row be­fore the in­ter­est (21%) kicks in.

The fa­cil­ity is cur­rently in a pi­lot phase and can only be used in Pick n Pay stores, in­clud­ing the cloth­ing stores, na­tion­wide. Un­like a credit card, you can’t trans­act at ATMs.

“We know our cus­tomers are un­der pres­sure and we’re al­ways look­ing at ways to help them pro­vide for them­selves and their fam­i­lies.

“So, we are de­vel­op­ing a new Pick n Pay store ac­count to help cus­tomers man­age their gro­cery spend in an en­vi­ron­ment where the cost of credit can be ex­tremely high,” says Richard van Rensburg, deputy CEO of Pick n Pay.

While this credit fa­cil­ity may be tempt­ing, buy­ing gro­ceries on credit is not rec­om­mended be­cause you’re putting your­self in debt with “bad debt”, which is a term used for when con­sumers buy some­thing on credit which de­pre­ci­ates in value – gro­ceries are in­cluded in this.

If you are not pre­fund­ing the card or set­tling it in full at the end of the month, you are in ef­fect bor­row­ing money to pay for food.

“Cus­tomers have the op­tion of pay­ing off the full bal­ance each month to get the ben­e­fit of no in­ter­est on the whole ac­count, ex­cept for se­lected trans­ac­tions which can be placed on bud­get, at an in­ter­est rate of 21% – for ex­am­ple, a trans­ac­tion to pur­chase a fridge or mo­bile phone,” ex­plains Van Rensburg.

If you ab­so­lutely have to buy a fridge in an emer­gency sit­u­a­tion, the Smart Shop­per credit fa­cil­ity could be a life­saver, but make sure you com­mit to pay­ing it off over the 12-month pe­riod.

How­ever, there are ways to use this credit fa­cil­ity to your ad­van­tage.

Savvy shop­pers can ben­e­fit from Pick n Pay’s cur­rent pro­mo­tional of­fer whereby R200 will be cred­ited to ac­counts for any pur­chases you make over R500 be­fore Fe­bru­ary 28.

This means you’ll make a quick R200 while swip­ing your card for your usual gro­cery shop with­out in­cur­ring any in­ter­est, pro­vided of course, you pay off your debt in full.

There’s no ini­ti­a­tion fee, but you will pay a R10 monthly ser­vice fee for us­ing the fa­cil­ity. Cus­tomers get free SMS no­ti­fi­ca­tions on all pur­chases and free monthly state­ments via email or SMS.

“The fa­cil­ity pro­vides the cus­tomer with the flex­i­bil­ity of pay­ing a min­i­mum bal­ance by pay­ing the ac­count off over 12, 24 or 36 months. If a cus­tomer chooses this op­tion, an in­ter­est rate of 21% will be charged on the ac­count.

“There are no ad­di­tional monthly or con­tract ini­ti­a­tion fees if the cus­tomer chooses to pay the min­i­mum bal­ance,” ex­plains Van Rensburg.

While the Smart Shop­per fa­cil­ity al­lows you to pay off the card through min­i­mum bal­ances, try to pay as much as you can so that you pay off your debt quicker.

You can ap­ply for and man­age the credit fa­cil­ity on­line at pick­n­pay.co.za/store-ac­count or call the Pick n Pay Store Card call cen­tre on 0861 555 995.

– An­gelique Ruz­icka

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