Store cards can feel like "a lovely big voucher"

21-year-old Karen got in to a spiral of debt when she bought a suit for a job interview using a store card.

Sometimes it’s all too easy to be tempted by offers such as 'buy now, pay later,' and for many of us, it’s often the most attractive option out there when we are shopping.

But how clued up are you when it comes to borrowing money, or taking out store cards or credit cards?

Karen, who works in a café and is a keen shopper, debt problems started when she needed to buy a suit, for a job interview.

“I had 120 quid saved up," she said. "So I went up to buy it, the woman asked if I wanted a store card with it and because I didn’t have one, I thought why not!”

And so the spiral begins

"I got the suit, got the card, she did the credit check. She said you don’t need to pay for this now," Karen recalls

"I thought this is amazing, I bought loads of other stuff with the money because I didn’t have to pay for the suit there and then."

Karen did not realise how her store cards would end up costing her more in the long run, as finance expert Iona Bain explains “A store card does the same as a bank – the idea of them is to give you credit for spending instore.

"They also charge you an extra amount if you don’t pay back that amount on time.”

Karen said while she was prepared to find the money to pay back the cost of the suit she hadn't factored in interest and extra charges that might arise.

*“I knew I had to pay for the suit, but just thought at the time this is great, I could pay it off whenever," she said.

"About six weeks later I got the letter through saying you owe us £120 for the suit."

"I didn’t know what to do as I had no money in the bank."

"I took the letter put it in a drawer and forgot about it."

Temptation

Finance expert Iona Bain says offers such as these, can be really tempting to start off with,

"It can be like getting a lovely big voucher to go and spend in that shop,but actually that isn’t free money, you will have to pay it back.

"If you do fall behind on those payments you are going to have pay back, even more than you would on a credit card, on a mortgage on almost every other type of debt.”