Topman card - what have I signed up for?

libertino

I was in Topman today and when I went to pay I was offered 10% off if I sign up for their card. At first I thought it was just a discount card, but when they started asking me for bank card details etc. I realised it must be a store credit card. I've never had a store credit card before so I could do with an explanation on how they work, how you pay for what you buy etc. I would have asked in the shop but I don't think the person serving me had much of a clue (when writing down my details he asked: "Do you have a date of birth at all?", and when telling me I'd get a 10% discount on my £45 spend today he took a few seconds to work that out to be £8) and I couldn't be bothered asking for another member of staff so thought I'd just sign up to get the discount then check it out when I got home and cancel if necessary.

I've found the website at http://www.topmancard.com

If you can let me know the ins and outs of store cards and when I need to pay for the stuff I buy (or do they take it automatically, as they have my bank card number?) that would be much appreciated!

robpw2

its virtually same as credit card only with much higher charges id pay it off in full and cancel

libertino

I've never had a credit card either, only debit cards! How do I pay it off? Do I need to wait for a bill/statement?

CannyJock

Only way these things ever work is to clear the full balance as soon as you get your statement in and then cancel the card.

They don't offer you the discounts for your benefit, it's purely for theirs

And they hope that as you've got the card you'll shop there more often and spend more each time "because you don't need to pay for it, you just put it on the card!".

Clear and cancel - and when you cancel get it confirmed in writing incase it just sits on your credit file as an active card with a 0 balance.

CannyJock

libertino wrote: »

I've never had a credit card either, only debit cards! How do I pay it off? Do I need to wait for a bill/statement?

There will be a customer service number on the back of the card - you can phone that and make a payment using your debit card over the phone, or you can wait till you get your statement and then phone them to make the payment.

robpw2

libertino wrote: »

I've never had a credit card either, only debit cards! How do I pay it off? Do I need to wait for a bill/statement?

yes wait for your first statement then clear off in full and write to cancel and get proof

libertino

OK so I'll do nothing until a statement comes, go to my bank to pay it off, then cancel my Topman account and get proof.

Thanks for your help. These stores shouldn't be allowed to offer such cards without educating their customers! Good job I've got you lot.

wayoflife

"I've never had a credit card either, only debit cards! How do I pay it off? Do I need to wait for a bill/statement?"


ok guys 2 things to consider here;

firstly I would pay the card off in full and then close it. Dont just cut it up, make sure you close it! The TopMan card, along with other store cards are very limited in building up your credit history, as you can only use them in the Topman shops (and a few other arcadia shops)

second of all a credit card has some traits of a debit card, but in order to run it you MUST run it completeley differently;

The main difference is that (for most cases) with a credit card you are borrowing money, and therefore in debit. You can do several things with a credit card, these are;

Purchasing- to buy products, services e.t.c. This should be your only use first of all. some shops have a minimum limit for credti card use, some have charges so make sure you avoid using your cards when there is an extra credit card charge involved. (The main one being a travel agent)

Cash withdrawels- Ok NEVER EVER EVER EVER witdraw cash from a credit card, NEVER NEVER NEVER even for just one day EVER, you got it?!!! You will end up severeley worse off (please read the interest section below to find out why)

Balance Transfers- With your first card you wont need to do this. This basically involves transfering a 'debt' from another card to your new card.

Credit card cheques- Again I wouldnt touch these (please read interest below)


INTEREST

Interest is charged to your account in a number of different ways;

Purchases- In the majority of cases interest is charged on purchases if you don't pay the balance off in full by the statement due date. After this the interest is charged daily, and will keep compounding (you will be charged interest on the interest)

Cash Withdrawels/checkes- No matter when you pay this off, even if it is the next day, you will be charged interest from the second you take the money out, and in most cases the cheque is cleared. It really isnt worth taking money out like this and you will be charged a much higher rate of interest than purchase interest

Balance Transfers- you will have to ask your card company about this. There are also fees with nearly all of the cards now. However you wont need to know about balance transfers yet, as this is your first card.

Interest is charged at different rates and applied/paid off to your account to your disadvantage [in most cases!] (i.e. the lower interest will be taken off first) this is called the payment heirachy. As you are only going to purchase, and pay off in full each month, you dont have to worry about this.


PAYMENTS

Companies require you to make whats called a 'minimum payment' each statement date (see statements) which is typically 2.25-3% of the outstanding balance. In general please pay your balance off in full, as the minimum payment is designed to keep you in debt for a long time and will cost a hell of alot more. Please see this link to Martin's danger minimum payments article;
http://www.moneysavingexpert.com/cards/minimum-repayments-credit-card#calc

You can pay really in 2 main ways;

Wait until the statement comes through then make the payment (either by cheque, cash in branch/store, via telephone e.t.c.) I wouldnt reccomend this, as if the statement doesnt arrive, if you are on holiday, if you forget to make the payment, if you are working, if you are ill (you get my point!) you will then miss the payment which you must NEVER EVER do, it has bad effects on your credit profile.

Set up a Direct debit via your bank to clear the full amount each month. This is really the best way of doing this, as you are guaranteed by the direct debit guarantee (which states that if the company mess up and take the wrong payment e.t.c., you are entitled to a full and immediate refund)

STATEMENTS

Ok lets say you get paid monthly, your wages will go into your account on (or very near)to that date yes? ok it is a little bit more complex with credit card statements,

credit card companies generally work on a 28-30 day statement cycle. This means that every month the statement cycle will be different; example;

xxx credit card- statement cycle 07th of every month

this means that before the 07th of every month your purchases will be added to that statement. Anything after this will be added to the following month

to re iterate;

06th January- buy food
07th January- buy petrol

the food will be added to your January statement (therefore due in February)
as the petrol was purchased after the statement date then it will be added to the next month (due in March)

WHY BOTHER??!!!!

All of this seems very hard work! here are just a few advantages of using credit cards;

You are covered by the card for most big purchases. This means they are jointly responsible with the merchant for the purchase.

It is an interest free loan Pay off in full and you wont be charged interest. Therefore in effect you are getting an interest free loan for a month. The best thing to do is to offsett your money into a savings account (which you can ask if you need this explaining!)

Benefits Most cards offer benefits/rewards such as cashback and vouchers, which (providing you pay in full) are free!

It builds up your 'credit status' a debit card wont do this. basically your credit status is something which tells any lender (mortgage company, bank e.t.c.) what you are like as a borrower. Unless you win the lottery or are very well off it is an almost certainty that you will need to utilise some sort of borrowing facility in later life, therefore by doing this you are creating a good reputation for yourself.

Become a stoozer! Once you have been using cards for a couple of years you can look into whats called stoozing. It is basically an advanced way of using credit cards to make you money! This takes alot of patience and understanding of how credit cards work, (and also a good credit status) so I would suggest a minimum of 12 months before you look into this.

SUMMARY

Credit cards are good, providing you follow these simple rules;

always pay your card off in full each and every month!

Never go over your credit limit (this will be on your statement/told to you when you apply)

Never take cash out!

dont do too many applications for credit! start with one card and wait for at least a year!


Now I know there are many times where I have indicated that there are some exemptions, and there are, I just want to keep it simple for you to start off with

my advise is to take this on board (im sure other long term moneysavers) will back this up! and start using a credit card each month for a specific purchase (i.e. food, drinks or petrol) and pay off in full each month. In a year you can look into multiple credit cards/ stoozing e.t.c.

chuckley

CannyJock wrote: »

Only way these things ever work is to clear the full balance as soon as you get your statement in and then cancel the card.

They don't offer you the discounts for your benefit, it's purely for theirs

And they hope that as you've got the card you'll shop there more often and spend more each time "because you don't need to pay for it, you just put it on the card!".

Clear and cancel - and when you cancel get it confirmed in writing incase it just sits on your credit file as an active card with a 0 balance.

couldnt u apply this to CC's?? as in 'they dont offer u 0% for 9 months for ur benefit...' Anyway they send u vouchers in the post, invite u to '1st look/buy at the sales' and they send u discount codes, ie, free postage.

if u dont pay it off fully each month yes u earn int but its the same as a CC. and no the interest isnt always higher than cc's. my RI card APR is lower than my CC.

chuckley

libertino wrote: »

OK so I'll do nothing until a statement comes, go to my bank to pay it off, then cancel my Topman account and get proof.

Thanks for your help. These stores shouldn't be allowed to offer such cards without educating their customers! Good job I've got you lot.

maybe they think as ur over 18 u should know what ur signing for. dont blame them for ur own ignorance. They arent supposed to be educating u... u do ur own research. they offered it to u... u didnt have to take it...

_Andy_

libertino wrote: »

Thanks for your help. These stores shouldn't be allowed to offer such cards without educating their customers! Good job I've got you lot.

In what way should they educate you? We all have free will to make decisions about financial products and the tools to research them (internet, etc.)