A store card is rather like a credit card but it is used to pay for items in just one particular shop or a set of shops all owned by the same parent company. Many larger stores offer them and they can be useful because you might get discounts or other advantages because you own one. Like a credit card, you get the option of repaying the card in full or just repaying a small amount. There are prod and cons of doing each.

Pros of Repaying in Full

Repaying the card in full will be the cheapest option available to you. It will mean that you avoid paying any interest or charges and therefore you will save all of that money. The cost will vary depend on the specific store card that you have but you will tend to find that the interest can be pretty high, especially compared to other ways of borrowing.

It can also be good to know that it is paid off. Some people like the feeling of knowing that they have repaid their card in full and that they will therefore be able to use it again without worrying about the cost of paying off things that they paid for on it previously. They may just use it for the offers they get for being a card holder and because they get interest free credit on items, they buy with it as they do not have to repay them immediately. If they repay the card on time, there will be no charge and therefore you can consider it to be interest free credit.

Paying off your store card each month can save you a fortune.

Pros of Repaying Small Amount

Repaying just the minimum amount means that you can spread the cost of the item that you have bought. You will not need to find the money to pay for it all in one go but you will be able to pay for it over a series of months or years. This could mean that you will be able to use the card to buy something that you would not have been able to afford otherwise and then take your time in paying for it afterwards.

If you have other loans that have higher costs than the store card then it will be better to spend more money paying them off first. This will be more cost effective and then you can pay this store card off once the more expensive loans are repaid.

It is worth remembering that there are other options when repaying a store card apart form paying in full or just paying the minimum. It is possible to pay any amount back between these two amounts. This means that even if you want to repay in instalments you do not have to repay the minimum but you can pay more. This means that you can still spread the cost but you will repay it more quickly than if you only repay the minimum as the minimum may only cover the cost of the interest and not much more.

So, whether you repay your store card will depend on your situation. Think about whether you want to get the loan repaid quickly and whether you can afford to repay it all in one go. If you can afford to repay a bit more and want to repay it then you should do so. If you want to repay it but do not have the money then you should work out whether there is a way that you can get more money, either by earning more or spending less which will help you to repay more.

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