Store Credit Cards with Australian Retailers

If you really want to be set free from debts, you need to be willing to make sacrifices. With self-discipline, determination and efficient budgeting, you should be able to make debt consolidation work for you.

Woolworths have just released a store card to promote consumers to use it for all purchases in the Woolworths chain. This will then accumulate data and be used by the marketing team at Woolworths when trying to make targeted campaigns to make you buy stuff!s.

Woolworths Everyday Money Credit Card is what it is called.

To read the article I read go here: http://www.smh.com.au/news/technology/woolies-new-card-will-trail-shoppers/2008/08/26/1219516518185.html

This article is actually filled with quite a lot of false information. I have an extremely good understanding of the store cards which retailers such as Harvey Norman, Myer and Coles use – and can say with 100% certainty that you will not find a promotion over 24 months in which you are not required to make a payment and that no interest on these cards is ever back dated. If you can’t get your balance paid off within the allocated period of time, you only pay interest on the remaining balance, and it only starts accruing after the expiry date.

I’ve been using these cards for years and as long as you think about what you’re doing (as you should with any card) these can be a fantastic way to purchase large items. Certainly a lot easier than trying to pay it off within a month anyway.

Hi Alexandra,

Thanks for the comment. Of course not all people fail to understand how these cards work, but a lot of people purchase in the heat of the moment and neglect to understand that the interest rate they will be paying is much higher than one of the big 4 banks would provide on such a line of credit.

The information provided is on a best efforts basis, so if the information doesn’t add up for you that is good, it means you have done your research and can provider further insight.

I have personally held one of these cards and witnessed the back payment of interest get allocated after the expiry date. Maybe we are dealing with different providers or changes in the companies, as mine was around 4 years ago and caused quite a struggle for me as a student.

As you said, responsible use of anything can be helpful – its just all to easy to be irresponsible when dealing with credit.

I work in the industry and with these cards and need to correct several assumptions you have made.

I understand you are wanting to warn people to read credit contracts carefully when taking out store cards. This shouldn’t just apply to store cards- everyone should read and understand ANY credit contract they are entereing into BEFORE they make the application. If you are refused a copy of the terms and conditions or are not fully understanding anything, don’t do the application.

In regards to these cards, especially Harvey Norman, people are only approved for what they can afford, based on the information they give to be assessed on an application. As a consumer, to look after yourself, make sure you put your CORRECT information on the application (e.g income, expenses, other credit cards, # of dependants, etc). i find most of the affordability issues I have had to deal with stem from people providing false information on the initial application to force an approval. Also, most of these lenders have teams that can help out with stopping fees and interest if you are going through a hardship situation.

Another falsehood is the once the promotion expires, interest is backdated to the intial date. This is incorrect and is in fact against Australian law. Any interest charged is on the remaining balance on the account and is dated after the expiry. Also, the monthly fees on these accounts, when you compare them to a yearly fee on most credit cards, you are still saving money.

The companies make their money in these promotions not form the customers, but from the stores. The stores pay a fee to offer the promotions that is usually a percentage of the financed amount (hence why most stores will give you a lower price for cash) Most of the fees on the account go into servicing the account (cards, cusotmer service, stationery, covering debt collection, etc).

I also am aware that most of these products to not have an early payment penalty (especially if it is a repeat purchase card), in fact you are encouraged to make extra repayments to pay out the amount before the promotional term ends.

if you have had a bad experience with one of these card (terms and conditions not explained instore, applicaiton not clear, etc)- go through the store’s complaint/feedback service. Most of the issues with these cards stems from the salespersons on the floor not receiving enough training about the features of the product or them being too rushed due to trying to get as many sales as possible that they don’t spend the time needed to take cusotmer’s through the intial process.

This isn’t going to change unless you bring it up with the right parties, and complaining about it on the internet is not the right way.

Hello
Alexandra I believe your information is incorrect as it does not matter what the balance is at the end of the promotion you will be charged interest on the total purchased amount if you have not paid it off completely. But these cards can be used to your advantage if you use them like a lay by and pay an amount every month, Calcutate how much to pay every month with two months up your sleave for the unforseen. I have been using the GE money card by Harvey Norman for 7 yrs with no drama.

Worked fine for me. 3 years interest free on a washer & dryer, $50 a months for 3 years all paid off. $180 of fees over the three year term. But that is nothing compared to what accrued interest on a loan would have been!