When proceeding to the checkout, a lot of cashiers will ask if you have a store card before you pay. If you answer no to this question every time, then you could be missing out on potential benefits every time you swipe your card, or even on credit offered by the store.
Here’s what you should know about store cards, how you can get store credit and how to use it.
Explaining Store Cards and Credit
Store cards are offered by many South African retailers including Woolworths, Truworths and PNP.
These cards allow for special benefits when you swipe your card or make a purchase. These benefits can include discounts on later purchases, discounts on current items, loyalty and reward points or even credit to make purchases in store and settle the account over an agreed time period, usually a few months.
Store cards are worth applying for. When used responsibly and carefully, they can give your budget a little bit more room by the end of the month – and they can also help you to keep your credit score in good standing when you faithfully settle your account on time.
Applying for a Card
Most store cards are applied for in-store, but can also be applied for online. First, an application is submitted to see if you qualify – and from there, you’ll receive your card delivered either to your nearest branch, or to your door via courier (sometimes at an added fee).
A few basic documents are required to complete your application, usually the same ones that you would submit when applying for a loan. Make sure you have these ready:
• ID Document
• 3 Months’ Bank Statements
• Proof of Residence
If you’re self-employed, a business owner or a contract worker, you might be asked for additional paperwork such as your payslips, proof of income or ITA34 from SARS, although certain credit providers won’t grant credit if you’re self-employed at all.
Avoiding Scam Offers
Only apply for store cards, credit and loans in-store or from the provider’s website directly. Avoid links in e-mails, special offers and social media posts for finding credit: Many of these are scams that are hellbent on stealing your information or money and could have been avoided with just a simple click to the legitimate website to check.
What a Store Card is Not
Credit cards are usually offered by your bank (Visa, MasterCard and American Express are the leading options) and can be used anywhere. What makes store cards different to credit cards is the fact that they are usually limited to one or several stores part of the same group, and can only be used for purchases at these stores.
Tips for Using Store Credit Right
Credit is often seen as the enemy of a happy financial future, but when used right, it can give you a leg-up when you need it. Here’s how to use a store credit card to your best benefit:
1. Always pay your credit instalment on time – and where possible, pay more than your required instalment. This looks good on your overall credit score, and shows that you’re a more responsible individual when it comes to your finances.
2. Make arrangements or shift your payment date if you notice ahead of time that you might be unable to pay the next instalment.
3. Never exceed credit past your limitations to pay them. Before taking on any loans or swiping that card, ask yourself if you know how you’re going to pay off the credit when the time comes.
4. Use store credit for only essential purchases. If you run up credit for nothing, you might be entirely alone when you need it most.
Alex J. Coyne
Alex J. Coyne is a writer, journalist and card player. He's been published in international publications including Moneyweb, CollegeHumor, Funds for Writers, Great Bridge Links, Bridge Canada Magazine and a variety of others