• Store Cards

    Is it Right for Young People to get Store Cards?

    It can be difficult knowing what the right age for borrowing should be. Obviously, lenders have rules about what age people should be when they start to borrow but this does not mean that it is not too low. Some people might also argue that there are some sorts of borrowing that are worse for young people to do. They may feel that store cards, for example, are not suitable for a number of reasons.

    What is a store card?
    A store card is like a credit card but issued by a particular store to use when shopping with them and any other companies in their chain or other branches. They work in a similar way to a credit card in that you can buy things using the card and do not have to pay for them until they send you a statement 4-6 weeks later. This will show what you have spent on the card and you will have repayment options. You will be able to pay just a minimum amount if you want to which will cover the interest payment and a little more or you can pay off the full amount that you spend or something in between.

    As the card can only be used in particular stores, then it can be tempting to always shop in those. If it is your favourite store then this could be great, but it could mean that you are buying there when you could get them cheaper elsewhere. You may also be tempted by sales and offers that are sent to cardholders which might make you buy things that you do not need.

    If you decide not to pay off the card in full then you will start to accumulate debt. Although the card will get paid off eventually, it will take a long time and you will be charged a lot of interest in that time. It is best to pay them off right away and then you will not have to pay anything and you can still take advantage of any deals that card holders might get.

    Should young people avoid them?
    It can be harsh to judge someone by their age and say that they should not have a store card because they are not responsible enough. Whether you should consider having one should really be based on whether you will use it sensibly and some young people are more sensible than older ones.

    You should get a card if you are sure that you will be able to repay the full balance each month. You might even be able to set up a direct debit to do this so that there is no risk that you will forget to pay it. Obviously, you will need to be sure that you have a good income coming in so that you can afford those repayments and that you keep a track of what you are buying so that you are sure that you will be able to afford it. You may be able to track this online or you could alternatively keep a written record of what you are spending to make sure that you only spend what you can afford.

    You also need to think about whether you will be sensible with the card. You need to think about whether you will only buy things that you really need and want and will make sure that you cannot get them cheaper elsewhere. You should be able to compare prices online. It can be tempting to buy things that seem to be a bargain and that you cannot afford because you have the card but if you know that you will be sensible and not do that then it is less risky for you to get one.

    So, age is not necessarily a factor when you are deciding about whether to get a store card. It is much more important to make sure that you are committed to repaying the full balance off each month so that you do not have to pay any interest. You also need to make sure that you are not tempted to spend extra money in the store just because you have the card. Check prices and make sure that you shop elsewhere if you can get items cheaper in another store. Also make sure that if you get special card holder benefits that you are not tempted to spend more money than you can afford or buy things that you do not need just because they seem to be a good bargain. So as long as you have a good understanding of how the card works, the risks of using it and have enough income to repay the card in full each month then it does not matter whether you are old or young.