If your store card accounts are in arrears or heading into ‘persistent debt’, then we could help you repay this and get your finances back on track. With a debt consolidation loan, you could repay your creditors, leaving you with just one affordable monthly payment to make.
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A store card is a type of credit card which can only be used in certain shops. Like credit cards, you use these to buy goods and then make repayments at a later date. The problem is though, many store cards come with high interest rates.
Before you know it, a small purchase has turned into something with huge consequences. With growing financial pressures and growing interest, paying off a store card can sometimes feel like an impossible task.
Like many questions relating to money, this answer depends on your situation. If you’re struggling to meet the repayments though and you have large amounts of store card debt, you probably have too many.
Another way to determine if you have too many store cards is to consider your credit utilization ratio. This is an indicator of how much credit you have available and how much of your credit you are using. Usually it is recommended to keep this at around 30%.
Store cards do have several advantages. For example:
However, they also have several negatives. For example:
To determine whether debt consolidation is worth it for store cards, you should make sure you’re total payment is less than you what it would be if you didn’t have a consolidation loan.
For example, if you held three store cards, owing £500, £200, and £300 on each at Representative 29.9% APR, it would mean over two years you would repay a total of almost £1,300 to clear the original debt assuming you didn't spend any more.
However, if you took out a £1,000 debt consolidation loan – at Representative 12.9% APR – you would repay around £1,130 over the same period. In this example you will be saving £170 in interest over a two year period.
This also doesn’t take into consideration other debts which you might have. By combining all of these into one loan, you might find debt consolidation is certainly worth it.
If you have any questions about your individual circumstances, please speak to one of our team members.
If you’re struggling to repay your store cards, debt consolidation could close these accounts and leave you just focusing on making one loan repayment each month.
If you're looking to take out a UK debt consolidation loan, you should look to close your existing store cards as soon as you pay off the balance. Having those cards open can lead to continuous spending that could leave you in more debt.
To find out if you qualify for a debt consolidation loan, get in touch today and we’ll help find the best solution for your needs.
Our online application includes a soft search and will not harm your credit rating, and we consider all credit histories. The lender will perform a hard credit check which will appear on your credit file.Get My Loan
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