Why Store Cards Cost You So Much (And How to Stop)
Store cards like Woolworths, Edgars, and Mr Price seem harmless. But they charge very high interest — often 20% to 28% per year. That R500 pair of shoes can end up costing you R800 or more if you only pay the minimum. Here is what you need to know.
Key Takeaways
- Store cards charge 20% to 28% interest per year
- Paying only the minimum means you pay for years
- A R5,000 store card balance can cost R2,000+ in interest
- Always pay more than the minimum payment
- Consider cutting up cards once they are paid off
How store card interest works
When you buy something on a store card and do not pay it off in full that month, the store charges you interest on the remaining balance. Most SA store cards charge between 20% and 28% per year. This interest is added to your balance every month, so you end up paying interest on interest.
- Woolworths card: around 20% per year
- Edgars / Jet: around 22-25% per year
- Mr Price: around 24-27% per year
- Interest is charged MONTHLY on whatever you still owe
The minimum payment trap
Stores set very low minimum payments (often just 5% of your balance or R100, whichever is more). This seems nice — but it means you will take YEARS to pay off your balance. Most of your payment goes to interest, not to reducing what you owe.
- A R5,000 balance with minimum payments takes 5+ years to pay off
- You will pay R2,000 to R3,000 in interest over that time
- That R5,000 of clothes actually cost you R7,000 to R8,000
- The store WANTS you to pay minimum — they make more money
What to do if you have store card debt
Do not panic. Here is a simple plan to get rid of store card debt as fast as possible.
- Stop using the card immediately (cut it up or freeze it)
- Pay as much as you can each month — not just the minimum
- If you have multiple cards, use the snowball or avalanche method
- Call the store and ask if they can reduce your interest rate
- Once paid off, close the account or keep the card at zero
Should you close your store cards?
Once your store card is paid off, you have a choice. You can keep it open (which helps your credit score) but never use it. Or you can close it completely so you are not tempted. If you struggle with self-control, close it. Your peace of mind is worth more than a credit score point.
- Keeping it open with zero balance = good for credit score
- But only if you trust yourself not to use it
- If you are tempted, close it — your mental health matters more
- You do not NEED store cards — a debit card works everywhere
Ready to see your own numbers?
Use the Debt Snowball Planner