Some shops offer finance options to help you pay for items such as electrical appliances, computers or furniture. Like some personal loans, you pay the money back at a fixed rate over a fixed term.
But like any financial agreement, it is important to know how much this finance is going to cost you and whether there are alternatives. While many shops have special offers, such as no interest for the first year, you should check what the interest rate after that year will be. If you have not paid for the goods by the time the interest-free period runs out, you could end up paying a lot more than you would have if you had paid cash.
Remember that even where there is an interest-free period, you enter into a credit agreement from the day you sign and you need to be aware of what you are signing up to. So, shop around for the goods first and then think about how you are going to pay for them.
Why you might use in-store credit
The main reason you might choose in-store credit is convenience. So, it saves you having to visit your bank, building society or credit union to arrange a personal loan.
But you should be aware that this type of finance is not as flexible as a personal loan, and can often work out more costly due to higher fees and charges you may not have thought about. For example, if you buy a television worth €900 on store credit over 4 years, the cost of credit could be as much as €400, so the television could actually cost you €1,300.
Always compare the cost of an in-store credit agreement with a personal loan before signing up to any agreement. You can check out the cost of personal loans using our financial comparisons or by contacting a bank, building society or your credit union.
Last updated on 25 August 2017