How to make smart use of store finance

In-store finance can help you fit out your home faster. Here's how to use it wisely so you don't end up paying over the odds.

Sponsored by humm90. Get up to 110 days interest-free on everyday purchases and pay off large items with a 0% interest instalment plan for up to 15 months for a small fee (23.99% p.a. purchase rate applies thereafter). Plus, get long-term, interest-free finance offers at select retailers. T&Cs apply. Learn more.

Sponsored by humm90. Get up to 110 days interest-free on everyday purchases and pay off large items with a 0% interest instalment plan for up to 15 months for a small fee (23.99% p.a. purchase rate applies thereafter). Plus, get long-term, interest-free finance offers at select retailers. T&Cs apply. Learn more.

From furniture to whitegoods, carpeting and curtains or blinds, there are all kinds of different elements that go into making a place feel like home. And most of the time, it takes more than a pretty penny to get everything set up (or to refresh it after you've lived somewhere for years).

So what happens if you don't have time to save up for everything you need? That's actually what store finance is designed for: to help you buy what you need, when you need it.

Also known as in-store finance, this form of credit is usually offered as a variation of one of the following options.

• 0% interest payment plans. With this option, you get your items straight away and pay them off in regular instalments for a set amount of time, with no interest charges. For example: 0% interest for 30 months.
• Deferred payment. If you've ever seen a catalogue or store sign that says "buy now, pay nothing til [DATE]", that's a deferred payment plan. This option is also referred to as "buy now, pay later" but is different to services like Afterpay because it's usually offered through a credit account and may allow you to pay off your purchases in a lump sum (rather than through instalments).

While these types of finance offers can be convenient, there is a catch: you'll be lumped with high interest charges if you don't pay off your entire purchase by the end of the interest-free period. In some cases, the interest costs could be close to 30% p.a.

There can also be credit establishment fees and monthly account fees that add to the overall cost.

So if you're thinking of using store finance to get a new couch, washing machine or something else, here are five tips to help you use this form of credit effectively.

1. Check how the finance is set up

Some in-store finance options give you access to a single credit facility that gets closed when you have paid off your purchases. But there are also a few that can be used on an ongoing basis, at different stores.

For example, if you get finance through a humm90 Mastercard or Gem Visa facility, you would have the option of using that account for finance offers with other brands. Just keep in mind that if you did that, you'd have more plans (and balances) to manage.

2. Give accurate information when you apply

Just as you would for a loan or credit card, you need to complete a credit application when you want to make use of a store finance offer. This means filling out a form that asks for details including your name, address, employment status and estimates of your regular income and expenses.

You'll have the greatest chance of being approved for store finance when you provide the most up-to-date information on your application.

3. Don't sign up for multiple schemes

If you're furnishing your whole home, you may not be able to get everything you need from one store – or even through a single store finance offer.

While this could make it tempting to apply for finance in several different stores, juggling plans and payments is time-consuming at best and expensive at worst (say, if you accidentally miss the due date for one of the finance plans).

Instead, you might want to use a combination of cash and store finance or save up and buy items one by one to help make the costs more manageable.

4. Make payments in full (and on time)

You will get the most value out of store finance when you can avoid extra fees and charges. And not meeting repayment requirements almost always leads to higher costs.

So, take note of the payment due date and the amount that's required for each payment – then make sure you pay it a few days before the due date so that it's processed on time.

If your in-store finance offer is set up for automatic instalment repayments, it's also worth making sure your chosen account has enough available funds before a payment is deducted. And for deferred payment plans, you might even want to set money aside each time you get paid so that you have enough to clear the balance in full when the promotional period ends.

5. Shop around to make sure you get a good deal

For specific items like furniture or whitegoods, it pays to check out options in a few different stores to see if there are any sales, coupons or deals. A similar approach works for in-store finance too: looking at a few offers before you make a decision will help you learn more about what's available with different stores, what items you could use the finance for and how practical it will be based on your budget.

It's also worth checking out what you can get second-hand – either in a nearby store or on platforms like eBay, Gumtree or Facebook Marketplace. Some of the stuff sold this way can be practically new and, if you're replacing a tired piece of furniture, you may even want to swap or re-sell it to help pay for new items. As well as potentially saving you money, this can be a greener option because it helps break the cycle of consumption and waste.

So explore as many possibilities as you can, because ultimately that will help you get what you want, in a way that's affordable for you.

If you are struggling with your personal finances, consider speaking to a professional financial counsellor by calling the National Debt Helpline on 1800 007 007.

Pictures: Getty Images