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Store Cards

Play with the devil and win

By Money Team

Updated January 2016

Store cards are the devil's debt; most charge a hideous 25% plus interest, and even the best aren't better than high street credit cards. Yet it's possible to play with the devil and win.

The trick is to get the card, get the discounts and then pay it off immediately, so you don't pay a penny in interest. We tell you how to play the system.

Store cards are the devil's debt; most charge a hideous 25% plus interest, yet it's possible to play with the devil and win.

The trick is to get the card, get the discounts and then pay it off immediately, so you don't pay a penny in interest. We tell you how to play the system and win.

What's a store card?

Store cards work and feel very much like credit cards, except that while credit cards can be used anywhere, store cards can only be used in a specific store or store group. They're often confused with loyalty cards, yet with store cards you can 'pay and borrow'; loyalty cards just gather points.

It's important not to confuse store cards with store-branded credit cards; Tesco, Sainsbury's, Asda, John Lewis, Marks & Spencer all have these. These are a different breed and can be used anywhere. Many have loyalty schemes attached - eg Tesco's Clubcard credit card.

Why the devil's debt?

Gold BarsIn a nutshell; because these are dangerously easy to obtain, hideously expensive, manipulative beasts.

Time to hit back... dancing with the devil

dancing partnersIt's possible to profit from a store card, but only if you never use them for borrowing on. As we already mentioned - interest rates can be around 30%, so make sure you pay the card off in full as soon as you get the statement.

Some example store card intro offers

Walk into many shops on the high street and they'll try and flog you a card with your shopping. Yet offers change, you want at least a 10% introductory sign up for it to be worth the hassle.

Will it hit my credit score?

tick boxesSigning up to lots of store cards (or lots of credit cards for that matter) can damage your ability to gain new credit, yet if you've a good credit score there's no need to be unduly worried; there are no hard and fast rules, but many have successfully applied for more than ten cards with no problem.

It's not how many, but how often that counts.

Each time you apply for a card, a search is added to your credit file. Lots of these in a short space of time will shoot down your credit score; the overall number of applications is less important than the frequency.

If you're grabbing discounts, spread applications out every few months or so and cancel old cards; don't just cut up any card you won't ever use again. Other factors that count include total debts, repayment history and income.

Pick applications wisely and never bag a store card intro discount just before needing credit elsewhere – this includes applying for a new contract mobile phone, car or home insurance, as well as loans, mortgages or credit cards for borrowing.