A store card works very much like a credit card. You can use it to buy things in a specific store and then you will have until the end of the month to pay off the full balance or you will be charged interest. There are advantages and disadvantages to having them.
It can be really good to be able to spend money and then wait until later to pay for it. If you organise it well you can make the repayment date just after your pay day and so you will have plenty of money to pay it off. It can even help you to organise your spending better as you will know when you have to pay for it and that you will have money there to afford it.
Often when you have a store card you get advantages over other customers as well. You may be invited to preview evening on new lines or sale items, you may get extra money off or loyalty points. You may be sent special offers as well. So if the card is for a store that you shop in regularly it could be well worth getting one so that you can take advantage of the offers and it may help you to save money.
It is wise to be very careful though. If you do not set up a direct debit to pay off the full outstanding balance of the card each month, you may find that you miss a payment and then end up paying interest on it. The interest works in the same way as a credit card in that you get n interest free period after buying the item and then after a certain date you have to start paying interest on what you owe. The interest rates are higher than on credit cards though, so it is wise to always pay the balance off in full. As the interest rate is so high, you will find that it can be very expensive to repay the debt. The savings that you may have made through discounts are offset by the interest and perhaps you could even end up paying more for the items than you would have done at an undiscounted price if you had not had to pay for the interest charges.
Another problem with a store card is that you can only use it in the one store. This means that by having one you could feel that you should be shopping in that store more than others. This is what the store wants, but you need to be sure whether shopping in that specific place is really what you want. You do not want to be tempted to shop there when perhaps it would be cheaper to shop elsewhere or you buy things there that you do not really need or want.
A store card can seem innocent enough, but we can easily get a selection of them along with credit cards. If you start spending across a lot of cards it can become difficult to keep track on how much you are spending each month. You may find that when it comes time to pay them off, you do not have enough money and you could find that you will have to only pay the minimum balance. This will lead to you being charged interest on the debt and it will be expensive.
Some people find that having a card like this encourages them to spend a lot of money on it. They feel that they can afford a lot more because they have a credit limit on the card which they can spend up to. If you do this and then only pay the minimum each month, you could find that you get a very expensive and long term debt. It is worth thinking through whether you think that this is likely to apply to you and if so, it would be wise to avoid applying for the card altogether. It can be hard to know how you might behave when you have a card, if you have not had one before, but try to imagine how you would use it and whether you think that you would be disciplined enough to keep a close eye on what you are spending and pay the full balance off each month.
It is important to think about the pros and cons of the card for you. Will there be discounts that are worth taking advantage of and will having a delay before you have to pay it off be a good thing for you. Also consider whether you will spend more money than you need to and whether you will find that you will not be able to pay off the full balance and end up paying high interest payments.