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Store Cards

Is it Good to Have a Store Card?

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.


Should You Loan Money to Your Family or Friends?

Most people would think that if a friend or family member asked them to lend them money, then it would be a kind thing to do, to let them have some. However, it may not be as kind as you think as it can lead to problems in the future, so it is worth thinking things through first and discussing it carefully with them.

The first thing to consider is the amount. Is it going to be a significant amount to you that would mean that you have to go short in order to manage without the money. Could it stop you buying necessities and mean that you may have to borrow yourself in order to make ends meet. Think carefully about this as even a seemingly small amount could make a difference if you have an unexpected expense.

If you are sure that you will be able to afford it now, then think about how long you will be prepared to lend it for. You may feel you will need it back in a few months, a few years or whatever. Consider when will be the last possible date you will want it back and then make sure that you are willing to make it clear to the person borrowing it that they will need to pay it back by then. As well as being sure that this is something they will actually be able to stick to, which you may not know unless you have good knowledge of their financial situation.

It is also worth considering what effect lending money may have on your relationship with the person afterwards. It may not make any difference at all, but the chances are that it will. They will know that they owe you something and even after it is paid back they will have that feeling of gratitude that you helped them. Although that is not a bad thing, in some people they may see it as you being better than them and it could therefore cause uneasiness. It may be the other way round that the lender will always feel that the other owes them something even if it is paid back with interest. This could also cause problems. Other problems could occur if the lender needs the money back but the borrower is not able to pay them back. There may be very hard feelings between the two if this happens and it could even lead to a complete breakdown in the relationship.

Money is important to most people and not having enough can lead to a lot of stress. If the reason for not having enough is because the money was leant to someone else, then this could be a big source of stress between the two. If the lender asks for their money back and the borrower cannot pay it, then this could mean that they argue, fall out and may not find their relationship can recover.

Another potential problem could happen when you have lent money to someone as they may expect you to do it again. They may think that because you have already agreed to lend to them, that you will do it again. Of course, you may be able to do it again, but you may not have the money available and by refusing it could cause bad feelings between you. Of course not lending in the first place could also cause bad feelings, but if you explain you do not have enough to lend, this should be acceptable, but if you have lent money before, they may not think that you are being truthful when you refuse on a later occasion.

It can be really complicated, lending money. It can be wise to steer away from it completely, even if it is something that you can afford to do. It could cause problems in your relationship if you do. It can be hard though, as if it is your own children or grandchildren that are asking you will feel bad if you cannot help them. However, if you do help one of them, then you may feel that you have to be fair and help the others as well and if you have a lot that could be tricky and if they all decide to borrow from you at once, you may not be able to manage. Or you may have to turn some of them down, which could lead to bad feelings and jealousy and may not only change their views of you but perhaps to each other as well. It could break up parts of the family and no one wants that to happen. This is why it is always worth thinking really hard before you make decisions like this. It may seem like lending a bit of money may not lead to this, but money can be a very sensitive issue for a lot of people and therefore is worth a lot of consideration.


How Risky is a Short Term Loan?

There are different types of short term loan available, but essentially they lend a relatively small amount of money for a short time period. Many people use them but there are those that say they should not be taken under any circumstances because they are too risky. Obviously everyone is entitled to have an opinion, but if you are trying to decide whether they would be a good option for you, then you will need to know more about them and what the risks are.

Some short term loans are more risky than others. You will need to look at the risks on the specific loan that you are considering to see whether you feel it is worth having. You will be able to see what these are by looking at the terms and conditions, which can often be quite complicated and so are worth reading very carefully.
The main risks associated with short term loans are the consequences of not being able to repay them. These are the same with any loan, but they are worse for a short term loan because the fees for not paying on time can accumulate very quickly and it can be harder to negotiate alternative repayment terms.

Short term loans are becoming better regulated in many countries to try to prevent the costs rising so much. However, they are still costly compared to some other types of lending and it is often recommended to look at alternatives if you can. It can take time to compare prices of loans, but it makes a significant difference to the amount that you pay back in the end and so it is worth it. Even if your credit record is not that good it is worth trying alternatives that are cheaper. You may think that you will just be refused and short term loans often do not check so you are more likely to get one. It is still worth trying though as you never know until you apply as to whether they will decide to lend to you or not. A few minutes research and applying could make a really big difference.

If you are confident that you will be able to make the repayments on time, then it is less risky to take out a loan like this than if you are unsure. The loans can be expensive anyway and if you do not pay them back on time the costs can really rise and easily become completely unmanageable. That is why you should be really sure that you will be able to repay the loan if you decide to take one out. Consider what other expenses you may have in the short term and when the loan would need to repaid and how much it will be. This should allow you to calculate whether you will have enough money to pay it back.

Some short term loans use your car as collateral. This can be really risky if you do make the repayments as they can repossess your vehicle. This could mean that you will not be able to travel easily and could even mean that you will not be able to go to work. This could be a disaster as it would mean that you would have no source of income.

Any sort of borrowing can be risky. This is because you have to be sure that you will be able to pay it back and it is not possible to know what will happen in the future. You will never know whether you could lose your job, become too ill to work, want a family and give up work to look after them or need to care for a sick relative or anything else that might impact your income. It is easier to have confidence in what may happen in the short term rather than the long term though. If you have a twenty-five year loan, such as a mortgage, it will be hard to know what you might be doing in twenty year’s time but with a short term loan you should know whether you will have a job in the next few weeks. However, the short term loans are expensive and you will end up having to pay a lot of money back in a short time. This could mean that you will have to find a large sum of money fairly quickly. This can mean that you will struggle the following month as well, because of having to pay back the big loan including the large amount of fees that go along with it. It can lead to a cycle of borrowing each month, to make ends meet and then repaying next month and the amount borrowed will increase each time until it becomes too much to be able to repay.