...And Can I Interest You In A Store Card Today Madam?
In 2010 over 50,000 young people between 18-25 visited their local Citizen's advice bureau regarding debts linked to credit cards, store cards & maximised over draft facilities in order to feed their shopping habit.
I decided to post about this after being caught behind a young girl in the till queue at Dorothy Perkin's who had been marched into the shop by her angry Mother. The girl explained through tears to the store manager that because of the debt she had accumulated on her store card she couldn't afford to meet the monthly repayments.
In my attempt to look oblivious to the drama in front of me yet still overhear the conversation, I listened as the shop assistant explained to the irate Mother that as her daughter was 18, she was old enough to apply and be accepted for the scheme. I was quickly served by another cashier so I am not sure of the outcome, but I hope the girl & the chain managed to come to some kind of fair repayment agreement.
Is 18 too young to be offered credit? Most 18 year olds still live in the family home, so chances are their financial responsibilities will radically change within the next 5-10 years. They'll perhaps find themselves having their own mortgage or rent to pay, a car to upkeep, as well as the general cost of living & unavoidable utility bills.
Can a young person just starting out in adult life afford all this, along with a £300-a-month dark cloud of debits leaving their account? Standing orders feel like they have been in place for forever, to repay for clothes that are in his/her long forgotten teenage past? Can their modest salary afford it, or will it involve further lending beginning a vicious circle that could be carried on all through their adult life? What about the implications of a poor credit rating, will they be refused credit when they really need it due to a checked past?
I'm not a fan of store cards, but as they aren't going to go away I believe they should not be offered at least until the age of 21 - which thankfully, a few stores now comply. In complete contrast my occasional outburst at not being able to afford those £90 KG shoes the same week my rent is cruelly wiped from my account brings out the frivolous spender in me & thinks 'well we come into he world with nothing & we won't be taking our debts with us..." (which is true, although some T&Cs now state that your next-of-kin becomes liable to foot the bill!)
As the recession continues and our desire to own the latest must-haves grows, more & more places will tempt you to buy their goods on credit with their store cards, loans or high purchase. It is safer to stay within your own means & spend what you can actually afford - but of course this is easier said than done when the Saturday Girl in New Look is waving a plastic card in your face entitling you to take whatever you like in store home with you today without paying a penny...
Store cards usually charger higher interest than ordinary credit cards, so are generally best avoided as you'll end up paying approximately 30% on top of your original bill.
For information on consolidation schemes and advice visit Martin Lewis' Money Saving Expert website & their forums. Whilst I do not own store cards myself, I have used the well informed articles & letter templates on the site to successfully claim back unlawful bank charges.
Its also worth signing up to the MSE weekly email, which often feature promotional discount codes for a variety of beauty/fashion related websites, as well as general money news which is handily explained in layman's terms for better understanding - even for the blondest of people like me!
You can also contact National Debtline for free impartial debt advice.
So, what's the moral of the story? Never feel disheartened when you see someone constantly sporting a brand new wardrobe on each outing. Chances are, it probably still belongs to Topshop...