Should I Repay my Store card in full?

Having a store card can be very convenient. It can mean that you will be able to shop in your favourite places and use a card to pay so that you will not have to pay for items right away. It might also allow you to get discounts and special offers in store which are not available to other customers. This can be really great and you could feel that they are really worthwhile. However, the billing on the store card will give you a selection of options and it is worth being aware of these and the consequences of them so that you get the best from your card.

Paying the minimum balance

With a store card you will be able to buy whatever you wish up to the credit limit of the card. Then you will be sent a bill after 4-6 weeks and you will be told how much you owe. You will have several repayment options and one of these will be to just repay a small amount of money plus interest. This means that you can delay paying your card off for a long time but you will pay for the privilege. The costs of delaying your repayment can be really high and it is worth calculating how much these will be. The monthly charge may seem reasonable but if you add this up over a year or longer then it will be a lot of money. It can be convenient as it means that you can buy things now and now have to much very much until a lot later. You have to decide whether it is worth it. How valuable are the things that you are buying to you and if you add up the cost of paying for them later it is really worthwhile?

Paying the whole balance

If you repay the balance in full then you will get all the advantages of the store card without having to pay for them. Therefore, you will get access to the discounts and offers that might go along with having a card but you will have no interest to pay. This is certainly the cheaper option, but it will mean that you will have to be careful with how much you spend. You will need to be aware of what you are buying and how much it costs as well as how much available money you will have to repay the card when the bill comes. You might decide to keep some money by to make sure that you can afford it or be confident that you will have enough as you know your budget well. If you are not that good of keeping tracking of your spending, prices, your own bills and monthly balance then it could be wise to look at it carefully first. Then you will have a better idea of how much you will be able to afford to pay and therefore how much you can spend.

If you already have an outstanding balance on a card then it may be that you cannot afford to pay it all off in one go. As the repayment system on store cards is flexible it means that you can repay it in instalments. You will have to always pay the minimum balance, but you do not only have the alternative option of repaying the full balance. You could choose to pay a figure in between. So, think about how much you might be able to manage and repay that much. You can then slowly whittle down the debt and you will be able to eventually repay it more quickly. As the debt goes down; the interest you pay on it will also go down and this will mean that the interest charged will go down and so you will start saving money right away.

So, in answer to the question it is a really good idea to repay your store card in full. It will mean that you will save a significant amount of money as you will no longer be paying the interest on it or you will never pay interest on it. It can be hard to do this if we overspend and then do not have enough money to cover the repayment. Therefore, it is really important that we are able to keep a check on what we are spending and make sure that we can afford it. When we have a store card we may feel tempted to buy more than we need, perhaps because of special offers or to shop in that store rather a cheaper one because of the card and we need to be aware of this and try to avoid this sort of behaviour. It is not easy but if we are aware that it could happen then hopefully that will help us.