Pick n Pay is launching a credit facility that can be accessed through your existing Smart Shopper card, which gives you up to 55 days to pay back the money you borrow before the interest (21%) kicks in.
The facility is currently in a pilot phase and can only be used in Pick n Pay stores, including the clothing stores, nationwide. Unlike a credit card, you can’t transact at ATMs.
“We know our customers are under pressure and we’re always looking at ways to help them provide for themselves and their families.
“So, we are developing a new Pick n Pay store account to help customers manage their grocery spend in an environment where the cost of credit can be extremely high,” says Richard van Rensburg, deputy CEO of Pick n Pay.
While this credit facility may be tempting, buying groceries on credit is not recommended because you’re putting yourself in debt with “bad debt”, which is a term used for when consumers buy something on credit which depreciates in value – groceries are included in this.
If you are not prefunding the card or settling it in full at the end of the month, you are in effect borrowing money to pay for food.
“Customers have the option of paying off the full balance each month to get the benefit of no interest on the whole account, except for selected transactions which can be placed on budget, at an interest rate of 21% – for example, a transaction to purchase a fridge or mobile phone,” explains Van Rensburg.
If you absolutely have to buy a fridge in an emergency situation, the Smart Shopper credit facility could be a lifesaver, but make sure you commit to paying it off over the 12-month period.
However, there are ways to use this credit facility to your advantage.
Savvy shoppers can benefit from Pick n Pay’s current promotional offer whereby R200 will be credited to accounts for any purchases you make over R500 before February 28.
This means you’ll make a quick R200 while swiping your card for your usual grocery shop without incurring any interest, provided of course, you pay off your debt in full.
There’s no initiation fee, but you will pay a R10 monthly service fee for using the facility. Customers get free SMS notifications on all purchases and free monthly statements via email or SMS.
“The facility provides the customer with the flexibility of paying a minimum balance by paying the account off over 12, 24 or 36 months. If a customer chooses this option, an interest rate of 21% will be charged on the account.
“There are no additional monthly or contract initiation fees if the customer chooses to pay the minimum balance,” explains Van Rensburg.
While the Smart Shopper facility allows you to pay off the card through minimum balances, try to pay as much as you can so that you pay off your debt quicker.
You can apply for and manage the credit facility online at picknpay.co.za/store-account or call the Pick n Pay Store Card call centre on 0861 555 995. – Angelique Ruzicka