Store cards

Store cards offer clients credit up to an agreed limit but the interest rate on these cards is usually high compared with other forms of credit, including credit cards.

If you cannot afford to pay your store card by the due date, you can contact the store card lender (using the details that appear on your statement), explain your circumstances, and request a hardship variation.

The lender may agree (but is not obliged) to offer an affordable payment plan if you are in hardship.

Interest free store deals

If you have a store loan of the type “buy now and pay nothing for a period of up to 2-3 years”, you’ll find these loans can become very expensive if you cannot pay the entire balance within the interest free period.

If you still owe money when the interest free period expires, you usually have to pay interest from the date you purchased the goods. High rates of interest apply to these accounts and, with backdated interest, your debt is more than likely to be substantially higher than you expected.

You should contact the store card lender, explain your financial hardship and ask for a payment plan that you can afford.

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Your rights and options for store card debt

You have a degree of protection as a consumer along with a range of options for how you might manage your store card debt. It’s important that you act early, as soon as you realise you will not be able to pay, and contact the store card lender with a request for flexible payment arrangements – a hardship variation.

As with other forms of credit such as home loans, personal loans, payday loans and credit cards, lenders must belong to one of the two external dispute resolution schemes (the Financial Ombudsman Service or the Credit and Investments Ombudsman) and you should lodge a complaint with the relevant one if you are not offered a hardship variation that suits you.

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