There are all sorts of different ways of borrowing and a common method is to use cards. There are credit cards and store cards and it can be a good idea to think hard about what the difference is between these two types of cards and then you will be able to choose the one that you think will be the best for you.
Main Features of Both Cards
All of these types of cards have quite a few things in common. Firstly, they can be used instead of money to pay for things. This means that you do not actually have to have the money that you need. You will also not have to pay anything until a certain date. You will receive a statement and this will tell you how much you have spent and when you need to make a payment. You will have the option of paying a small minimum amount which will be the interest and perhaps a little extra or you can repay the full balance and avoid paying any interest. The statement may be online or posted to you and you can choose to set up a direct debit to pay it either the minimum amount of repay it in full. You can also pay any other amount, although this is not made clear on the statement.
Differences Between Them
With a credit card you will be able to use it in most shops, both online and on the high street. This means that it is very flexible and can be used a lot. With a store card you will only be able to use it in the specific store that issued in, any other branches that they have and possibly any other shops owned by the same company. This means that you can only use the store card in limited places compared with a credit card.
The interest rates on the cards will vary, but this does not mean that the store card will be higher than the credit card and vice versa. There is no pattern it will all depend on the specific card that you choose and so you will have to look out for this and think about what difference that will make to you.
Both cards might have some rewards or benefits. With store cards, you will tend to have some sort of benefits with regards to the store you are with. They might offer some money off purchases for card holders, perhaps when you first take it out or at certain times. They may offer early access to sale items or other things. It is worth finding out what the benefits are and thinking about whether they will be something that you would like to take advantage of and that will be useful to you. With a credit card there are some which give rewards. These tend to have a higher interest rate than those that do not and so you need to be careful when choosing these cards. They can be useful if you use them as normal and take advantage of the rewards as long as you repay them in full as otherwise you will be paying more than you are receiving by way of the rewards in high interest charges.
Some people might feel that it would therefore be better to have both a store card and a credit card so that they can take advantage of the advantages of both. While this seems to make logical sense, it is a good idea to make sure that you are very careful, With access to this much credit, you could find that you spend more money than you can afford and then find it very difficult to repay the card. It could end up costing you a lot of money in interest.