Women, fashion and debt
If you're a die-hard shopaholic, you're not alone -- four million British women say that over 50% of their debts are due to fashion purchases.
If you’re a die-hard shopaholic, you’re not alone—four million British women say that over 50% of their debts are due to fashion purchases.
Recession spending has made women particularly vulnerable as they attest that they shop to forget their financial woes.
Before you whip out your store card or credit card, ask yourself the following questions:
- Must I have the latest fashion item? Yes, the shops say it will sell out quickly; yes, you can put it on your store card—but do you really need it? Clothes and shoes depreciate in value—and anyway, true fashion is timeless.
- Do I really need a brand-name item? Is the product actually better than any other, or are you just paying for advertising and hype?
- Am I abusing my store card? While you may get 55 days interest free, store cards charge interest at a much higher rate than prime—you could be looking at as much as 24%. “Buy now, pay later” suddenly doesn’t look like such a good idea.
Tips
- Reduce your credit limit. Remember, you can negotiate how much credit you have on your card—rather act responsibly and stick to the minimum balance. If you have your credit limit reduced, this must be confirmed in writing and signed by both consumer and credit provider.
- Pay cash or use your debit card rather than a credit card. For obvious reasons, it’s better to spend money you have than money you don’t have.
- Monthly repayments may be low, but calculate the total cost of an item. Take a calculator with you and work out the interest, if necessary. That way, you’ll know what you can afford—and what you definitely can’t.
- According to Rajeen Devpruth, a senior supervisor at the National Credit Regulator (NCR), in terms of the National Credit Act, interest that can be charged on a store card is the repo rate x 2,2 + 10% = 24,30%. You cannot be charged more than this.
