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How to Make Savings with Store Cards and Affinity Cards

The lure of a store card or affinity card that offer discounts can be tempting. So why not treat yourself to these extra benefits? But beware! These treats only make economical sense if you don’t end up paying interest on your spending.

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29 December 2008

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Savings with Store and Affinity Cards

Taking out one of these types of cards just to get the discount, or rewards, can work if you use the card just for that.

The only way to make savings and earn rewards with store cards and affinity cards is to use them and ALWAYS pay the balance in full. If you don’t, any discounts or rewards will be negated by the interest you pay.

Affinity cards

These are credit or charge cards that offer extra benefits because they work in partnership with other organisations. Travel, charity, football, rewards, retail and cash back are all types of affinity cards.

If you use them you receive some sort of reward. For instance a retail credit card will give you a certain amount of points if you shop in store or elsewhere.

Many big name stores have their own credit cards and they convert these points into vouchers, which they send to you on a regular basis.

Likewise with football credit cards, if you shop in your teams’ own store you may be treated to a discount or other rewards. What is more, your team receive an income from the card-issuing bank, which it can use to help resource the club.

Store cards

These feel like credit cards but can only be used in the store, or store group that they are associated with. They are not to be confused with loyalty cards as you can spend and borrow on them and they charge an interest rate just like credit cards.

They are very tempting at first. If you are doing a load of shopping and are offered 10% discount on this initial purchase if you take a store card out – seems like a no brainer.

But the interest rates on store cards can be very high and if you don’t deal with that balance straight away – paying if off in full - the discount will be eaten up by the interest.

Work the system

Taking out one of these types of cards just to get the discount, or rewards, can work if you use the card just for that. The only way to make this work for you is to budget, use the card within that budget and then pay it off.

Never, ever be tempted to leave a balance on the card, as you won’t end up making any savings.

As most store cards offer an introductory offer you can be strategic about the way you use this. It’s Christmas and you want to shop in a store and so do your friends. So open a card, make use of the discount and a short period of interest free credit and then pay it back.

You may also open a store card just to get information about discount nights and store cardholder evenings. Shops often offer a discount on the evening so go forth and shop, get your discount, and, if you had to use your card to get that discount pay it back in full.

This is a repetitive mantra but cards rewards and discounts are only worth the while if you aren’t paying interest on your spending. Otherwise they are just a false economy that you could do without.

Best Buy Credit Cards

Credit Cards Balance Transfers Purchases APR Representative (Variable)
Tesco ClubCard Purchases Credit Card Logo Tesco Bank Logo Tesco ClubCard Purchases Credit Card Apply
 0%
9 months
2.9% fee
 0%
18 months
 
16.9%
Representative Example: The annual purchase rate is 16.9% p.a (variable) so if you spend £1200 your representative apr will be 16.9% p.a (variable)
Barclaycard Platinum With BT (27 Mths) Logo Barclaycard Logo Barclaycard Platinum With BT (27 Mths) Apply
 0%
28 months
3.5% fee
 0%
6 months
 
18.9%
Representative Example: The annual purchase rate is 18.9% p.a (variable) so if you spend £1200 your representative apr will be 18.9% p.a (variable)
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