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Are You Storing Up Trouble For The Future?

By: Diane Cossie

Thank goodness for those long hot summer days, the feel good factor of being able to eat in the open air, pack a picnic or head off to the beach, just one problem what do you have to wear?

Out comes the sunshine, and out comes the summer clothes you have been wearing for the last 5 years and realise that Ra Ra skirts are no longer in fashion, so ignoring the arrival of the next Autumn Winter mail order catalogues arrival earlier this week, you head for the nearest shopping centre and just as luck would have it, you have arrived just in time for the summer sales.

Not only can you add a few key pieces to your summer wardrobe, but you can stock up on holiday clothes, and all in Summer Sale prices. You carry out your recognizance mission of what is available, from where, in what sizes and in what colours, but hang on a minute; your next pay day is 3 weeks away, you do not want to dip into your holiday spending money because that would not be any fun, so you have a cup of coffee and plan your shopping spree. There are lots of bargains everywhere, but unfortunately your available funds will not let you shop around very much, so you head to the department store, the one where you have a Gold Card and you husband has access to the VIP TV lounge.

Now whether the sun gets to you, or you leave your sensible head back at home, but because you have money left to spend on your store card, or because there is a 10% Off your purchases today if you sign up for a store card, but you abandon your carefully found bargain list and shop for everything you can from one place because you can simply put it on your card and not have to pay for it all yet.

You justify your emotional expense by telling yourself that you will pay it off in full at the end of the month when you come back off your holiday and just to make sure your partner does not feel left out, you buy them something really nice as a special treat, after all it is in the summer sale.

Sales are conjured up by marketers as a promotion to encourage people to spend at times of the year when they know money is not flowing as freely such as after Christmas and during the summer. If you are anything like me you will notice that half the stock that seems to suddenly appear in the Sale was not even in the store the week before.

Now how does this turn into storing up trouble for the future, well it becomes multi faceted, the first thing you rarely do is:-

Pay off the balance when you said you would. Store cards carry on average annual percentage rates of 30% interest on any outstanding balances per annum, and that means they are one of the worst possible ways in which to spend money you have not got. Their fees and penalties tend to be very high too and if you accumulate a large balance quickly on a store card you will find yourself with ever increasing interest and charges that can spiral into huge debt problems.

Another problem can be the way you use the card itself. If you are encouraged to apply for a card to make a 10% saving on the purchases, do not sign up for the card unless you are willing to pay off the entire balance the minute the statement arrives. If you leave the balance to attract interest at the end of the month, it is likely to cost you far more than your original 10% saving.

Make sure the bargains are real bargains. It is all too easy to be swayed into buying something that is either in the wrong size, or wrong style and colour because of the price tag. Ask yourself whether or not you would have paid full price for the item in the first place, if the answer is no, then you should simply not even think about buying it.

Store cards should carry a wealth warning, as they can seriously damage it. If you are not the type of person who pays off your balances once a month like clockwork, you should never even think about owning a store card.

Article Source: http://articlescrub.com

Diane Cossie delivers personal finance ideas in a delightfully positive way. You can read if you dare about life without a credit card at:www.squidoo.com/ditch_your_credit_card

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