By Craig Brown
Store cards and credit cards have their advantages anddisadvantages, but which is best for you. In this article wepoint out some basics to help you take control of your spending.
Store Cards
Do you have a store card? How many do you have? Do you know howmuch you are spending on each?
Store cards are a great idea if you use them properly, but theycan cause huge amounts of personal financial damage if you don'ttake control.
When you are offered a store card here a few things to bear inmind:
1. Get very clear on what the offer is exactly. Most stores willoffer a card with a promotional deal - say 10% off any purchasesthat day and for the next week. So what exactly is the offer andhow long does it last?
2. Sometimes store cards are heavily pushed during a sale.Again, what's the offer - for example, do you get 10% off saleitems too?
3. What are the privileges you get as a store card holder? Doyou get a discount every time you shop? Do you get reward pointsof some kind? Do you get special preview events for new ranges?And what are the details - how many points, how many previews ayear?
4. How much credit are they offering you? And can you handle it- or will it make you feel like a kid in a candy store?
5. What are the repayment terms exactly? What's the minimumrepayment? What's the APR - during the offer period and afterthe offer period?
6. Are you bothered? It's easy to take up what seems like agreat offer with no effort on your part. But remember you wouldprobably have bought the things you are buying even if there wasno store card being waved in your face. Do you really wantanother piece of plastic, another debt?
7. Can you get the things you want cheaper elsewhere anyway?Most things you usually can do.
8. Can you pay for the things you want using your credit card?Credit cards usually have a much lower APR than store cards - sounless you can afford to make repayments in full, you could welllose in interest payments what you gain in special offers.
Credit Cards
The same kind of questions can be asked about credit cards:
How many do you have? Do you know what you're spending? Are youin control? What are the special offers - low interest, 0%balance transfers, etc? What's the credit limit and can youhandle it? What are the repayment terms, including APR?
The major differences from a store card are that you can use acredit card almost anywhere, and that the APR is usually a lotlower. It's also a lot easier to control your spending if it'sall on one card.
So when you've weighed up both kinds of card, what should youdo? Here's a couple of ideas:
1. For general use, have just one credit card. Keep the creditlimits low and in control.
2. If you are offered a store card and there's an unbeatableopening offer on your purchase, take it. Then, if you can't payoff the debt in one go, use your credit card to pay it off sothat you at least get lower interest charges. Next, when yourshiny new plastic card arrives, cut it up! Seriously. If youdon't destroy it you (or someone in your family) will spend onit and the debt spiral will continue.
For information on credit cards check out the American CreditCards Guide: http://www.americancreditcardsguide.com
Article Source: www.ArticlesBase.com
