green background with a kettle, TV, washing machine sofa and fridge drawn out- Provident Personal Credit

When your microwave blows up and money’s tight, you have a few options. Buying a new microwave from a catalogue enables you the flexibility to pay weekly or monthly with no need to dip into your savings. But what happens if your circumstances change and you can’t afford repayments?

Here we look at catalogue credit and what you can do if you can’t manage repayments.

How Do You Get Into Debt With Catalogues?

Falling into debt with catalogue accounts is a growing issue. Figures from StepChange show a dramatic rise in the number of people calling their charity due to catalogue debt over the last six years.

If you buy items from a catalogue and make weekly repayments but then find you can no longer afford to pay the amount owed, this is a consumer credit debt owed to a catalogue. Catalogue accounts are just like any other accounts and need to be repaid. What’s more, many people don’t realise that owing money to a catalogue is debt, or that buying items from catalogues can affect your credit rating.

Missing repayments can invalidate any 0% interest rates, meaning customers are then charged a monthly interest rate for the items bought, paying more for their items than if they had paid up front. Customers may also face charges such as late or missed payment fees. When you’re struggling to make repayments, this just adds to your money woes.

How Is My Credit Rating Affected?

Buying items on a weekly or monthly repayment scheme will affect your credit rating, as it’s a form of credit. Therefore if you miss a repayment it could have a negative effect on your credit rating.

The Pros and Cons Of Buying Items From A Catalogue

 

Pros

  • You get what you need, when you need it and can spread the repayments out.
  • Managing your payments could positively affect your credit rating
  • 0% Interest often offered

Cons

  • Check you’re not paying for extras such as product warranties or insurance
  •  If you miss repayments this can negatively affect your credit rating
  •  If you miss repayments the 0% interest period could end

What Are The Legalities?

Money owed to a catalogue is like money owed to a bank or any other financial business. Therefore, if you default on payments, the catalogue company can begin debt recovery procedures. This could include selling your debt to a debt collector or taking you to court to order you to pay.

You should be notified about any actions the catalogue company will take and you should check your credit agreement with them to understand your rights.

Click here to read more about your rights

What Can I Do?

If you’re struggling to repay your catalogue account, it can feel like you’re stuck in a hole. However, there are things you can do to help you manage your finances.

Speak to the catalogue company- explain that you’re struggling and ask to make smaller repayments. Catalogues are still bound by the same debt collection guidance as any other financial business.

Check for extras- if you’re paying for a product warranty or insurance, do you really need this?

Get help– contact StepChange. StepChange offer tailored and practical advice to help people to repay their debts.

The Money Advice Service has information on catalogue credit.

Alternatively, you could contact the National Debtline who offer free, independent and confidential advice.

Finally, the Citizens Advice Bureau give free, independent advice on managing your debts.

For more information on how to manage your debts, click here