Justmoney is calling on consumers not to overspend on their store cards this Christmas as the interest rates charged on them are high and you could be stuck with too much debt in 2017. “You could be paying through the nose in interest charges and admin fees if you don’t pay your store card off religiously or before the interest free period ends. It’s for this reason that I’d recommend that consumers not whip out their store cards at every opportunity in the run up to Christmas and take careful stock on what they can afford to spend,” says Angelique Ruzicka, editor of personal finance websites Justmoney and Moneybags.
Justmoney is also encouraging store card owners who opened accounts prior to 6 May 2016 to close their accounts and re-open them (if they still want them) to save money. “Consumers who took out store cards before the laws changed on the 6 May 2016, could be paying as much as 25.4%* in interest and paying monthly admin charges on top of that. Since the laws changed in May, stores cannot charge more than 21% in interest. Some are trying to recoup that by charging more in admin fees. Take a look at Justmoney’s comparison table where we illustrate the monthly charges, admin fees and interest you are charged and if you still want to get one try to pick store cards that charge a fair admin fee,” recommends Ruzicka.
Justmoney’s call comes as The Foschini Group (TFG), Truworths and the Mr Price Group are taking legal action against the National Credit Regulator (NCR) and the Department of Trade and Industry. “While retailers may be unhappy with the affordability assessments imposed on them by the NCR and government, we feel it’s essential that such laws are in place. It was just too easy to access credit,” points out Ruzicka.
Below are just a few ways in which you can save money if you own a store card, according to Justmoney: