Does having an in-store card make you bankrupt?

This is the question that I have heard countless times and to some extent it almost applied to me and I realized something had to be done about it. So this week I am going to share with you some ideas on how to stop yourself from shopping yourself to bankruptcy.

It’s very easy to get yourself an in-store shopping card from many of these leading stores like Edgars, Woolies, Truworths, etc… But what they don’t always say out load is that it’s also very easy to find yourself bankrupt and unable to pay for it later on.

I love shopping, and before I got a shopping card I used to wish that I had one, thinking it would make my shopping experience very easy. And the concept of earning extra points, or getting things at discount prices was just too good. I also like the idea that on days when I was broke I could just use the money or points on my card to get that last minute buy.

A shopper’s dream come true.

So it is with this reason that I went out and got myself a shopping card. Little did I know that this would not only make my wallet lighter, but that it could also potentially make me very broke for a while.

When you first get the card, you are given money or points that add up to a certain amount that they think you can afford to pay off, calculated from how much you earn from your job. But silly me, I thought it was free cash, and then afterwards I could start using my money.

Well I took the card with a big smile on my face and hit the stores like it was the last days and I didn’t want Jesus to come before I had spent it all.

I shopped and shopped and shopped.

By the time I was done I had spent over R3000 and I thought I was good, because I still had R1000 for the next time I went back to shop. I went home so happy that day and could not stop smiling; I had even bought things that I honestly didn’t need. I even ignored my usual instincts of looking for discounted items; I went full force and bought the latest of the latest.

When I got home I told my sister what I had bought and all about my new favourite card. She looked at me in shock and said, “Why did you spend so much money in one go?”

I was like, “Well, because they gave it to me and I don’t have to pay it back until I start putting my money on the card.”

She burst out laughing and I was completely annoyed with her.

“No, it’s not a free shopping spree, you have to pay it back. It’s a standard thing that they do when they give you a card, but the money on it has to be paid back.”

I was dumbfounded and nearly had a heart attack right there. She later told her friend who studied Tax Law and Finance, and actually understood a bit about this, to explain what the store consultant should have explained to me in the first place.

After knowing what I know, I now had to start paying the money back every month, which meant that I could not go shopping for a while. But at least I was not going to be blacklisted over shopping too much. It always amazes me when my friends tell me that they have more than one card at various stores. I look at them like ‘you’re crazy’.

I just hope that people will be more cautious about taking out credit cards. I agree that it is good to have a good credit record for when you want to buy a house or car, but just be careful on how you spend.

Tell us what you think: Is having a credit card really that bad?