• Loyalty cards such as the Sainsbury's Nectar card where you earn loyalty points with every purchase and it does not cost you anything.
• Store account cards which are actually more like a credit card and can have an annual interest rate (APR) of up to 30%! This is extremely high and costly, especially if you are not able to pay it back in time and you may find yourself in the debt trap. It is very difficult to get out of this vicious cycle of debt!

Store account cards can only used in that particular store or group of stores but serve as a credit card. Often, sales staff at the till are quite convincing. Always ask if it is just a loyalty card or a credit card. Staff members are often on a commission basis when offering you the card and as a result can be quite determined to get you to sign up.

Fortunately, there is a "cooling off period" if you sign up and then change your mind and you can cancel it before being tied into a contract which you might have signed unintentionally. Cooling off period in this sort of situation or for telephone sales is 14 days.

If you have a store card, PAY OFF the balance each month or you could find yourself in SERIOUS DEBT.

With an overwhelming number of credit card options, stores like Tesco, Adsa etc. also offer credit cards that usually do not carry as high an APR as the store account cards. The normal APR of credit cards issued by banks is between 15-20%.

Credit cards can easily land you in debt if you are not careful and sensible, as it is very easy to overspend and then struggle to pay it back.

If you already find yourself in this position, try to obtain a low interest-rate credit card or better yet, a consolidated loan to repay the debt on your cards. When acquiring a loan, think carefully before accepting loan insurance as this increases your repayments and if you find yourself in the position that you can no longer afford your repayments, loan insurance does not always cover you. You can read more about loan insurance on the BANKS page.