Shop Sharp Shock ñ For the Shops

Initial sales forecasts from the Christmas period are not good, if you run a shop that is. The figures are said to be around three times worse than the bleakest Christmas predictions. Clothing, furniture and DIY stores are all said to have been particularly badly hit and a KPMG study has predicted 2008 to be the worst year for high street growth since 1992.

But it’s not all bad news – on the upside this could mean big opportunities for consumers on the hunt for bargains in the sales as retailers drop prices further and extend the sales into February.

Don’t mix your purchases with your BTs

If you’re keen to take advantage of the situation while it lasts then it could be worth taking out a new credit card and with 220 cards on the market, many of these have great introductory rates on purchases available right now.

Card experts concentrate on balance transfers most of time focusing only on those in debt. But purchase deals mean you pay 0% interest on the items you buy for a specified period of time. That allows you to pay no interest so long as you pay of the debt before the deal expires.

If you were to buy some furniture for £500 with the Lloyds TSB Platinum MasterCard, which offers six months interest free on purchases, for example, then you would be able to make monthly repayments of £83.30 back to the card and effectively purchase the furniture interest free.

The most competitive card, based solely on the interest free period is the Halifax One Card MasterCard which offers zero per cent for twelve months and a number of cards offer six months while many offer three months.

If you wish to transfer a balance to one of these cards then many of them offer competitive balance transfer fees and an introductory interest free balance transfer period. Barclaycard’s 14 Month 0% BT Card, as the name suggests offers 14 months interest free with a fee of 2.5% for the initial move.

This is a very competitive card given that most balance transfer cards offer between twelve and fifteen months interest free and do not come with the 3 months interest free on purchases.

Don’t throw caution to the wind

While this January’s sales may offer a golden opportunity to snap up some bargains it is important to think about whether you’re going to be able to afford the purchases in the first place.

It wouldn’t be wise to take on more debt than you can afford given that 2008 could turn out to be a tricky year for consumers too. With many lenders tightening their belts it may become difficult to come by further credit if you run into trouble with payments.

If you think that 2008 could be a year where your credit cards come back to bite you then start thinking about a balance transfer card rather than a purchase card. The Virgin Money credit card for example has a zero per cent balance transfer period of fifteen months and a transfer fee of three per cent. This means that if you were to move £8,000 on to the card you would have to pay £240. This could work out well however if you were paying 16% APR on this debt which would work out at £1,280 in interest over a year.

Consider your options

Whatever your situation there will be a card for you. Purchase cards are a great option if you have no existing credit card debt and are looking to take advantage of the sales. If on the other hand you’re feeling the strain then don’t sit on a 16% APR, get on to 0% deal and start repaying the debt.

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