Credit Cards & Store Cards

Credit Cards
Credit Cards are a form of borrowing used to purchase goods and services, to obtain cash advances and for debt consolidation. For the majority of credit cards interest is charged if the balance is not paid in full by the ‘payment-due date’. You can benefit from up to 59 days interest-free credit depending upon when your purchase is made. Some card providers charge an annual fee which can be waived in certain circumstances..

A specified credit limit for each cardholder will be agreed at the outset: it depends upon individual circumstances and this is reviewed regularly.

Most credit card issuers insist on the cardholder paying a minimum amount each month or paying a percentage of any outstanding balance each month. There may be a penalty for late or returned payments or for exceeding any personal credit limit. Adding more money management problems and increasing the need for debt consolidation..


Credit cards may offer introductory rates that are lower than the standard interest rate for a specified term. This introductory rate is usually for purchases and balance transfers but it may also apply to cash advances. It is advisable to check the terms for clarity..

The interest rate charged on cash advances is usually not the same as for purchases. There is usually a fee for using your credit card to obtain cash and an additional charge for using your card abroad.

Balance transfer rates are applied to existing card debt that is being moved from one issuer to another or a consolidation of other debts. These rates tend to be lower than standard rates and apply to the debt consolidation or transferred for a specified term or until it is repaid in full.

For cardholders who pay off their interest in full each month there are other benefits offered. Loyalty points are a way of gaining a benefit from using your card and can be used in varying ways. Other cards offer benefits such as free travel accident insurance, discounts on holidays, or free purchase protection insurance (particularly useful if buying over the Internet or by telephone).

Store Cards
Store cards are a form of credit card but are issued by or for a particular retailer and can only be used in that retailer's store(s) / chain (unless it is endorsed by a credit card company).

In recent months store cards have been heavily criticised by consumer groups because of the very high interest rates they attract. Indeed it is not uncommon for major finance houses to charge in excess of 32% APR on their store cards and as such can prove to be a very inefficient method of borrowing..