Ultimate Guide to Catalogue Debt
Using store or online catalogues can be a convenient way to purchase items and spread the cost through monthly repayments. Catalogues can help you make larger and expensive items more affordable.
This is because you won’t have to pay the full amount straight away. However, catalogues can be a very expensive form of credit, as they typically have much higher interest rates. Most catalogue companies will allow you to spread your repayment plan through monthly instalments, generally these will last between 6 to 24 months. Almost all offers will include interest, an amount payable in addition to the product cost. This means that even if you only make the minimum payment, it may lead to a larger debt.
What happens if I don’t pay my catalogue debt?
If you’re unable to make payments to your catalogue agreement, whether you’ve missed payments or failed to even make the minimum payment, the catalogue company will request that you pay a higher amount towards the outstanding balance to catch up. If you’re still unable to pay, your account will go into default.
If your account ends up defaulting, additional action may be taken against you. To start with, the account you have held with the catalogue company will be closed and you won’t be able to make any further purchases.
The catalogue debt could also be passed onto a debt collection agency who will contact you to recover the outstanding amount. The creditor (catalogue company) may also decide to take court action against you.
Finding it difficult to manage catalogue debt? Speak to a Refresh money advisor today by calling 0800 121 48 63 or complete the online form on this page to request a call-back.
Why are catalogue debts considered to be non-priority debts?
Catalogue debts are a form of consumer debt, this means that they will be treated as a non-priority debt.
You shouldn’t prioritise any payments towards your catalogue debt over any household expenditure, including living costs.
Here is a list of things you should prioritise over catalogue debt to give you an idea:
• Mortgage / rent
• Council tax
• Utility bills (gas, electricity, water)
• Travel costs
• Food and housekeeping
• Baby items
Will I have to return the items I bought from the catalogue?
No. Items through catalogues are not bought through a hire purchase agreement. Because of this, you won’t be expected to return the items. However, it’s important to check the terms and conditions of any agreement before proceeding.
Making minimum payments to catalogue debt
If you regularly make payments towards your catalogues, this will help you clear the outstanding balance each month. In many cases, catalogue companies will only require you to pay the minimum amount each month.
Unfortunately, if you’re only making the minimum repayment towards the catalogue debt each month, this may only cover the interest and not the cost of the actual item you initially purchased.
If this continues, the debt can build up gradually, and become more difficult to manage when factoring in other expenditure.
What if I cancel my catalogue purchases?
If you’ve recently placed an order through a store or online catalogue and you’re unsure about the affordability, or you’ve realised that you may not actually need the items. Consumer rights will allow you to cancel your order if you’re within the return period.
If you have yet to receive the item(s) and they haven’t been dispatched, you can call the catalogue company directly to cancel the order. If the item is on its way through the post, or you’ve just taken delivery, you can still cancel your order. Most companies offer a 14-day return period, starting from the day you receive the goods. Remember that postage costs to send items back to the catalogue company are not likely to be covered.
It will be a lot easier on your finances if you are returning items for any of the following reasons:
• You don’t have a need for the item
• You no longer want the item
• You’re unable to afford the item
If you have decided that you do need the item(s) and they’re within your affordability, it shouldn’t be a problem. If you receive goods that are either faulty or not as described, you are within your right to request a replacement or full refund.
How can I get help with my catalogue debts?
If you’re falling behind with catalogue debt repayments, or you’re concerned about how creditors will react, speak to an expert advisor at Refresh Debt Services today.
We’re able to provide you with expert advice and guidance for any catalogue debt or other debts that you may have.
You can call us on 0800 121 48 63 or you can request a call-back at a time that’s convenient for you by using our online web form.