Tips to Paying off Retail Debt

Getting a store charge card can help you build up your credit profile when you’re just starting out, but retail credit cards also come with some of the highest rates in the credit card industry.

You could easily find yourself paying 25 percent or more in interest if you keep a running balance. It is a costly type of debt that should be at the top of your pay-off list.

Study the Terms of Retail Charge Accounts

Take the time out to carefully look over the terms of your retail debt account — completing this one simple task might motivate you to take affirmative action starting today. A J.D. Power study found that two-thirds of borrowers don’t really understand how their cards work, which is why many are stuck in a seemingly endless cycle of debt.

First pull up your latest statement and review the rate table to find out your APR. In most cases the rate on a retail card is variable, which means that it can go up at any time. Next, read your credit card agreement from beginning to end (it is sometimes available for download online but you may have to call your creditor to request a printed copy). Check out the method the retail creditor uses to calculate your interest charges each month as well as penalties and fees.

Once you take a look at your terms you’ll better understand why it’s so important to pay down these types of credit accounts as quickly as possible. As Melinda Opperman of Springboard Nonprofit Consumer Credit Management suggests, "When you go to make a purchase on credit, know what the true cost is going to be if you don't pay it off right away."

Cut Up the Card

The first step to cutting down retail debt is to cut off the spending. Get a pair of scissors and slice the store card up into tiny slivers — you don’t need it. More often than not a retail charge account is something that you use to take care of your wants, not your daily necessities.

Cut Costs

Make a quick pact with yourself: you will not go shopping for at least two months except for purchasing the barest necessities. Use every extra dollar you save during those two months to put with your minimum payment on your retail card. You just might find that this is a pattern you can stick with for the long haul — especially when you see how much your balance goes down after just a couple of months of financial discipline.

Just Say No

Just when you think you’re out, they try to pull you back in! Once you’re finally done paying off your retail debt (and in the meantime) remember to just say “no” whenever a sales associate asks you to open up a new charge account; even if you’re offered a discount. Compare saving $10 on a purchase today with spending thousands in interest later on.

If you don’t have cash to buy what you want from a retail store you simply can’t afford it at that moment. Wait — add it to your “to-buy” list and set a savings goal so that you can buy it at some point in the future instead. After a few days of waiting you might even decide that you don’t really need the item anymore.

Getting a store charge card can help you build up your credit profile when you’re just starting out, but retail credit cards also come with some of the highest rates in the credit card industry.

You could easily find yourself paying 25 percent or more in interest if you keep a running balance. It is a costly type of debt that should be at the top of your pay-off list.

Study the Terms of Retail Charge Accounts

Take the time out to carefully look over the terms of your retail debt account — completing this one simple task might motivate you to take affirmative action starting today. A J.D. Power study found that two-thirds of borrowers don’t really understand how their cards work, which is why many are stuck in a seemingly endless cycle of debt.

First pull up your latest statement and review the rate table to find out your APR. In most cases the rate on a retail card is variable, which means that it can go up at any time. Next, read your credit card agreement from beginning to end (it is sometimes available for download online but you may have to call your creditor to request a printed copy). Check out the method the retail creditor uses to calculate your interest charges each month as well as penalties and fees.

Once you take a look at your terms you’ll better understand why it’s so important to pay down these types of credit accounts as quickly as possible. As Melinda Opperman of Springboard Nonprofit Consumer Credit Management suggests, "When you go to make a purchase on credit, know what the true cost is going to be if you don't pay it off right away."

Cut Up the Card

The first step to cutting down retail debt is to cut off the spending. Get a pair of scissors and slice the store card up into tiny slivers — you don’t need it. More often than not a retail charge account is something that you use to take care of your wants, not your daily necessities.

Cut Costs

Make a quick pact with yourself: you will not go shopping for at least two months except for purchasing the barest necessities. Use every extra dollar you save during those two months to put with your minimum payment on your retail card. You just might find that this is a pattern you can stick with for the long haul — especially when you see how much your balance goes down after just a couple of months of financial discipline.

Just Say No

Just when you think you’re out, they try to pull you back in! Once you’re finally done paying off your retail debt (and in the meantime) remember to just say “no” whenever a sales associate asks you to open up a new charge account; even if you’re offered a discount. Compare saving $10 on a purchase today with spending thousands in interest later on.

If you don’t have cash to buy what you want from a retail store you simply can’t afford it at that moment. Wait — add it to your “to-buy” list and set a savings goal so that you can buy it at some point in the future instead. After a few days of waiting you might even decide that you don’t really need the item anymore.