DON’T BE lured BY CARD PRO­MO­TIONS

Store ac­counts can be use­ful, but be dis­ci­plined writes An­gelique Ruz­icka

CityPress - - Business -

Ad­min fees, high in­ter­est rates and pushy call cen­tre agents who are keen to sell you other prod­ucts are just some of the few neg­a­tive things you are in for when you get a store ac­count. I’m not say­ing store cards are evil, but the devil is def­i­nitely in the de­tail. With the fes­tive sea­son not far off, pro­mot­ers are lurk­ing at the en­trances of stores, hop­ing to en­tice shop­pers to open an ac­count and spend heav­ily, and they have many per­sua­sive tech­niques up their sleeves to win you over.

It would be un­re­al­is­tic to sim­ply rec­om­mend avoid­ing store cards al­to­gether, although this is highly rec­om­mended. In­stead, we’re go­ing to high­light some savvy ways to deal with store credit of­fered by re­tail­ers such as Edgars, Fos­chini and Wool­worths.

While store ac­counts come with trap­pings and temp­ta­tions, there are things you can do to avoid pay­ing more and get­ting into fur­ther debt, while tak­ing ad­van­tage of the process.

THE IN­TER­EST-FREE PE­RIOD

When you open a store card, you gen­er­ally get to buy some­thing and not pay in­ter­est on it for six months. How­ever, once the in­ter­est kicks in, it can be hefty.

HANDY TIP: Be dis­ci­plined and pay your store card off be­fore the in­ter­est-free pe­riod ends. If you do this, you will have bought your clothes us­ing credit, but won’t be pay­ing any­thing ex­tra.

VOUCH­ERS AND DIS­COUNTS OFF YOUR NEXT SHOP

An­other way stores snare cus­tomers to open an ac­count is by of­fer­ing you money off your pur­chases. Edgars, for ex­am­ple, is run­ning a pro­mo­tion in which you get R600 off your first pur­chase if you open an ac­count.

There are of­ten terms and con­di­tions at­tached to such deals. In Edgars’ case, the dis­count voucher can­not be used to pay off your Edgars ac­count, nor can it be ex­changed for cash, and it can’t be used in con­junc­tion with any other sale or pro­mo­tion.

Some stores in­sist that you split up the vouch­ers. While they say you have R600 off, what they in fact mean is that you have to use the vouch­ers in R100 in­cre­ments, forc­ing you to spend more money more of­ten.

HANDY TIP: Care­fully read the terms and con­di­tions. Only use the vouch­ers if you in­tend to do some shop­ping any­way. Once you’ve used your voucher, the key is to pay your ac­count off so that you ben­e­fit from the dis­count with­out be­ing forced to pay in­ter­est on any credit.

THE EARN POINTS WHILE YOU SHOP TRAP

Some store card providers have re­ward schemes in which you earn points on your pur­chases.

HANDY TIP: It can help to ac­cu­mu­late these points so that you get dis­counts off your pur­chases, and take ad­van­tage of other re­wards and dis­counts that are on of­fer through part­ner com­pa­nies. But don’t shop just so that you get more points. Re­ward schemes are gim­micks and stores use them to col­lect more in­for­ma­tion about their cus­tomers’ spend­ing habits and likes so that they can sell them even more stuff. The cost of the re­ward scheme may al­ready be built into your mem­ber­ship.

THE PUSHY CALL CEN­TRE AGENT

Once the of­fers and dis­counts have ex­pired, you may find there’s no need to keep your store ac­count open. And good on you if you think this way – af­ter all, they’re a temp­ta­tion and they are one of the most ex­pen­sive forms of credit to have. How­ever, call cen­tre agents can be pushy and a night­mare to deal with. They may try to per­suade you keep the ac­count open and “just not use it”. Or you may be trans­ferred from one agent to an­other un­der the pre­tence of try­ing to find the right per­son to deal with your can­cel­la­tion.

HANDY TIP: Be firm with your wish to can­cel your ac­count. Stay on the phone and call back if they hang up on you. Don’t get dis­suaded as you get trans­ferred from one per­son to an­other. If you don’t get any joy, com­plain on so­cial me­dia or go up the man­age­rial chain un­til you are heard and you get what you want.

Re­mem­ber, it’s in their in­ter­est to keep the ac­count alive as they are still col­lect­ing ad­min fees, even if the ac­count is on a zero bal­ance.

It’s sim­ple to open a store ac­count – all you need is proof of where you live and your ID, and you’re set. A store card can be a use­ful fa­cil­ity if you know how to use it prop­erly and you take ad­van­tage of the sales and free­bies that come with it. How­ever, the key is not to get dragged into debt and abuse it. If you find you’re not dis­ci­plined about it, rather pay off the card, can­cel it and cut it up.

HOW TO BE SAVVY WITH YOUR STORE CARD

Don’t spend the max­i­mum al­lowed on an ac­count. If a store says you can spend up to R10 000 on your card, don’t be tempted to use all of this al­lowance – you’ll only drive your­self fur­ther into debt.

Make sure you’re on the in­ter­est-free plan. Typ­i­cally, on a six-month plan, you don’t pay any in­ter­est. How­ever, with The Fos­chini Group’s 12+ month pay­ment plan op­tion, you will be charged in­ter­est on any over­due bal­ance.

Make sure you pay off your card in full ev­ery month. If you think you may for­get to pay, set up a debit or­der so that you cover the in­stal­ments. If you miss a pay­ment or pay late, you could end up pay­ing penal­ties.

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