Shoppers are increasingly using credit catalogues nowadays. They offer a way to purchase items without having to pay the whole costs at checkout. This is perhaps one of the major factors that have made them so popular among shoppers. There is also a drastic increase in the popularity of bad credit and no credit catalogues.
Using credit catalogues comes with its fair share of pros and cons.
And for this reason, before signing up with one, you might want to carefully consider whether or not it can work for you. In this article, we will help you determine if a credit catalogue will help you by looking at the key aspects anyone looking to use a catalogue should consider.
So will credit catalogues work for you?
To help you answer this question,we will look at;
- How a credit catalogue works
- Bad credit catalogues and No credit check catalogues
- Credit catalogue payment options
- Credit catalogue interest rates
- Pros and cons of using credit catalogues
What is a credit Catalogue?
A credit catalogue is an online merchant that provides shoppers with various products on credit.
So the shoppers do not have to pay for their products at checkout. They can choose to take the goods and pay for them at a later date. The customer can also decide to spread the cost over several months or several weeks, so they pay in small instalments.
Purchasing goods this way from a catalogue is called catalogue credit, but it’s also commonly termed as a shopping account or a mail order account (which implies the fact that you have an account with a credit catalogue).
Acquiring a catalogue credit is similar to getting a bank loan in the sense that missed catalogue credit payments hurt one’s credit rating the same way missed loan repayments do.
How does a credit catalogue work?
If you want to use a credit catalogue you must be an adult (over 18 years old), have a regular source of income, a valid bank account, as well as, a permanent address history.
To sign up with your preferred credit catalogue, you will have to fill and submit an online application form. The application process is simple; it often takes less than 10 minutes, and you’ll get feedback within minutes.
Once your application has been approved, you will create an account through which you are going to manage your payments and purchases.
This account is not transferrable to any other person because all the financial obligations of the account are only vested in the individual that registered it.
Most credit catalogues allow one personal account per user. Some have various affiliates, and customers are allowed to shop for goods from the sister companies using their registered accounts. Upon creating your account, you can be granted credit immediately.
The catalogues, however, limit the consumers’ shopping by allowing purchases up to a specific amount. Among the major factors used to determine this limit is the shopper’s credit rating. The sum of limit offered usually varies from one catalogue to another, but in most cases, the initial limit doesn’t exceed £500.
The catalogue can, however, increase a customer’s limit to up to £2500 or more if the customer pays their bills regularly and promptly.
Credit Catalogue Payment Options
As mentioned earlier, credit catalogues offer customers a variety of payment options. While you are still allowed to pay the full cost of your goods at checkout, you may decide to pay a small amount upfront and clear the other later on. There is also the buy-now-pay-later option which allows customers to take goods and pay for them at a later time. Some credit catalogues allow shoppers to delay payments for 12 months or even more.
Better still, a shopper can choose to spread the costs over several weeks or months (up to 24 months). This way, they can pay small installments, making it easier for them to clear their debt. By allowing shoppers to choose a payment option that suits them, credit catalogues reduce the chances of having defaults.
Bad Credit Catalogues and No Credit Check Catalogues
A no credit check catalogue doesn’t check the credit rating of a shopper before giving them credit. Such catalogues aren’t concerned too much about the past credit history of the shopper. A bad credit catalogue, on the other hand, checks shoppers’ credit ratings, and you should at least have a not-so-bad rating to get approved for credit.
Credit Catalogue Interest Rates
A lot of credit catalogues offer free-interest credit for a specified period. Within the interest-free period, which is often between 3-12 months, monthly installments do not include interest.
This means implies that in case you manage to pay off the amount you owe within that period, the total cost of the goods you bought will be equal to the cost of the same goods bought normally, without credit. But if you do not complete payment on time, when the interest-free period elapses, your monthly installments will include interest.
The interest charged by credit catalogues varies widely, with the lowest being about 18% and the highest 60% per annum or even more (this is, however, usually applicable to longer-term payments or bad credit catalogues). On average, credit catalogues charge interest of about 38% per annum. You can easily avoid paying more by clearing your debt before the interest-free period elapses.
The Pros and Cons of Using Credit Catalogues
- Many credit catalogues guarantee 100% approval
- They stock a wide range of products
- They can help improve your credit rating especially when you make regular payments without delay
- You can spread costs, which makes it easier to purchase expensive items
- They offer such incentives as free delivery, discounts, and coupons
- Delayed or missed payments can hurt your credit rating
- Some, such as no credit check catalogues and bad credit catalogues have high interest rates
- It is easy to be lured into purchasing too much
So considering the various aspects discussed above, will credit catalogues work for you?
While they have a few drawbacks, credit catalogues can benefit you in a number of ways, especially if you have a poor credit rating