How Store Credit Accounts Work
A store credit account is a revolving credit facility issued by a retailer that lets you buy goods now and pay for them over time. Unlike an instalment sale (where you sign for one specific purchase with a fixed term), a revolving account gives you a credit limit that you can use, repay, and reuse. It is unsecured credit, which means it falls under the same National Credit Act protections as a personal loan — the NCA rate cap, the initiation fee cap, and the monthly service fee cap all apply.
What Interest Rate Should I Expect?
Typical South African retailer-issued revolving credit accounts charge between 19.25% and 27% per year, depending on your credit profile and the issuing retailer's pricing. The NCA caps unsecured credit at the repo rate plus 21% — currently 28% with the repo at 7% — so anything above that is unlawful. The calculator defaults to 22.5%, the middle of the typical band, and lets you adjust it to match your actual agreement. Always check the rate on your pre-agreement quote before signing.
What Fees Are Included?
The NCA allows two capped fees on top of the interest. The initiation fee is a once-off charge capped at R1,207.50 including VAT, usually capitalised into the loan principal so you do not pay it upfront. The monthly service fee is capped at R69.00 including VAT and is added on top of your instalment each month. The calculator includes both — the figures you see reflect what your statement should show, not just the raw amortisation calculation.
The Trap of Minimum Payments
Revolving accounts usually allow you to pay a small minimum each month rather than the full amortising instalment. That sounds friendly but it is the most expensive way to use the facility: at the typical minimum of 5% of the balance, a R10,000 purchase at 22.5% can take over a decade to clear and cost more in interest than the original purchase. The calculator shows the cost of clearing the balance over your chosen term — use a shorter term than feels comfortable to see how much you actually save.
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Disclaimer: Finance Atlas is not a registered Financial Services Provider (FSP). This calculator provides general guidance for educational purposes only and does not constitute financial, tax or legal advice. Always confirm current SARS rates and your personal tax position with a registered tax practitioner.