Depending upon the catalogue, you’ll need to fill out an application with your credit record. Every catalogue company is different and what one requires, another may not require. In general, you’ll need to fill out your name, address and any credit information you do have.
Your credit will be researched using credit rating agencies and then the decision will be made. If you are successful and do receive your credit, you’ll be able to purchase products from this catalogue on credit.
Should you default on any payments or agreements, you will have some negative items listed in your credit report and you may not be granted any further credit with the catalogue company. Furthermore, you may be required to pay the debt in full at once should you default.
If you’re trying to build some good credit, it’s imperative that you make these payments on time. Catalogue companies are often easier to get credit from than other loan companies if you have a shaky credit history or some negative comments in your credit report. Your credit is important if you wish to ever buy a house or car.
Catalogues in the UK will check with your credit references before making a decision on your credit application. If you have poor credit you may be refused a credit card by a catalogue company. Take heart, there are still some ways that you can improve your credit rating.
Take A Break
The more you apply for credit and get denied, the more likely you are to keep a low credit score. Focus on paying your debts on time and give your credit some time to repair itself.
Pay Off Outstanding Debts
If you’re struggling with some outstanding debts, call the lenders and make arrangements to pay off your debts. Working together for a solution will help improve your credit and help you to build up a greater credit score. If you’re not using a credit card you could close it but ask your lender if this will harm your credit score before closing the account. It varies with each company.
Keep Balances Low
Keep your accounts to a minimum. If you owe money on an account pay it off as soon as you possibly can. Keeping your debt to credit ratio low will help to re establish your credit worthiness.
Build A Good Credit History
Now that you are getting things paid off, it’s time to build yourself a good credit history. Once you’ve been able to pay debts on time for 12 to 18 months you should be able to start getting better credit scores. If you continue to repay your debts on time over the course of the following year, you’ll be able to improve your credit score even more and you may in fact be given a raise in your credit limits.
Everyone’s heard the self explanatory term, “Buy now pay later”. This credit policy has been the policy of many a mail order catalogue for decades. This credit scheme is to give customers the option to pay for things weekly, monthly or over a pre determined amount of time. Thus, if you don’t have the money to pay for that new television you’ve been dying to own right now, you can still get your television and pay it off over the course of the next year or so. You’ll make smaller payments, and pay interest until the item is paid off.
Many are wondering if there is a catch of some sort to such a credit scheme. The truth is, you’ll be paying for the item of desire, as well as interest and fees for using this payment plan. In short, you’ll be paying an additional amount over the payment period than you would had you simply purchased the item outright. Various catalogues will vary in the fees they charge for such credit plans. Some will also require a penalty if you pay the loan off early.
At present, there are three main catalogues which utilize these payment plans. Simply Be, Fashion World and the Marisota. From a quick glance, their interest rates will vary and you may well find yourself paying 34 percent interest in lieu of a regular credit card which may only charge 15 to 20 percent of an interest rate.
Many find it less expensive to borrow from their personal credit cards in lieu of “buy now pay later” methods which often cost a lot more in the long run. In some cases, the cost is nearly twice the original price of the item being purchased.
It’s also important to see whether the interest rates are variable or pre set.
The answer will vary from retailer to retailer, however, most catalogue companies usually provide the following payment options:
- Pay at website checkout – with debit or credit card
- Telephone payment – with debit or credit card, some times with bank account
- Direct Debit – payments automatically taken from your nominated bank account each month
- Post – paid with debit or credit card details you provide on a billing form
- Bank/Post Office – take your catalogue payment form to your local bank or post office and they will be able to process payment for you
- Payzone – a number of retail shops/newsagents now have Payzone terminals in their stores and most catalogues will accept payment using this option.
A lot of catalogue will initially provide a credit limit of £100-£300, however, a standard credit limit could be anywhere from £100-£500.
Getting access to a catalogue credit is not an automatic right: you will need to apply for an application, pass the company credit checking criteria and be approved first. Typically, to be accepted, you will normally have to be over 18 years of age or older, a resident of the UK and have a credit score which meets the company’s approval.
Once approved for credit, your account is handled in a very similar way to a normal credit card or bank account. You will receive a personal statement (either by post or online) each month which will show the following information:
- Details of goods and items you have purchased.
- The credit payments you have conducted during this period.
- What the minimum monthly payment amount is.
- The date that your next payment is due.
- Your current outstanding balance.
Depending upon the catalogue you have credit with, they will handle the credit in one of several ways. Some will charge and administration fee if you miss any payments. They may even charge you a late fee. Most catalogue credit companies have a minimum fee that is required to be paid each and every month. If you miss a payment, this fee may go up and you may be charged with additional charges or you may need to pay off the balance in full.
Missed payments are a big deal to most companies. They can add in fees to your account and you may wind up paying twice as much for the item that you purchased. If you miss a pre set number of payments, you may be sent in to a collection agency. These agencies work toward getting money form you for the account and you will incur additional fees if you are sent to collections. These additional fees can really add up and again, you may wind up paying more than the original cost of the item you purchased plus, you’ll have some negative points on your credit score.
Catalogue companies are to keep the customer informed of changes to their policies and charges. If the customer misses a payment they will be adding fees and these fees are usually mentioned up front. Know your customer rights and read the fine print.
This will vary from retailer to retailer, so it is best to check the catalogue payment company before ordering. Some catalogue companies such as Jacamo are happy to accept payment by cheque, however, cheque payments may cause a slight delay in your order as the cheque will need to be sent via the post and you will also have to wait a few days for the cheque to clear. Paying by cheque is easy – you just need to print the payment slip from the catalogue company and write the following details on the back of your cheque before sending it off:
- Account Number
- Home Address
- Post code
You will have a small window of time to cancel your order before it is too late and has already been processed and despatched by the catalogue company. It is best to check your account online to determine the status of your order and there should be an option to cancel the order if required. An alternative is to phone or email the company to cancel your order. If you are too late to cancel, it is still possible to get a refund by returning the items back to the catalogue company. Please note that some goods will not eligible for a refund such as perishable, personalised or media products such as DVDs and CD’s.