A beginner’s guide to instant catalogue credit…
There are many instances in modern life, such as new school uniforms needed or a broken washing machine where an online catalogue offering instant credit can be a lifesaver. To have the ability to buy now and pay later is a welcome relief to many and it is little wonder that the majority of households in the UK now have a credit catalogue account. If you use a catalogue account properly then it will not incur interest charges and when you take into consideration the seasonal offers and discount codes that many catalogues will send to their customers over the year, great bargains can be found against high street prices. As all your purchases will be delivered conveniently to your home, usually within a day of the order, and returned with very little hassle, online catalogue shopping has become as popular as it was in the 1980’s. The modern online instant credit catalogues have made everything easier, from having your goods delivered to suit you and easy payment methods, now the sharp and savvy shopper can easily obtain all their needs from the comfort of their armchair.
There are many catalogues to be found online and many of them will offer instant credit. This can be a confusing term. It should be made clear that all applications will include a credit check, or eligibility check, that can leave a footprint on your credit file. If you have a poor credit history then the amount you will be offered will possibly be a low amount at first, this is to build trust and as you maintain your account by pay your monthly statements in time, your credit limit will be increased over time. As a general rule the quicker you pay your account in full the quicker your credit limit will be raised.
To gain instant credit, is it wise to make an application in normal retail hours, as making an application overnight may take until the next day to have the application finalised. During the day, usually all decisions are made within half an hour. You are then given a personal account number and a credit limit. The credit limit will often be less than £200 to start with, but as mentioned earlier this will increase as a reward for maintaining a steady account with monthly payments made on time and covering the minimum payments. You can also pay off the account in full at any time. If you only pay the minimum amount each month then this is where you will find the interest charges making a big impact on the original price of the products you initially purchased.
You will be wise to consider the interest charges with each catalogue, the ones that have the lower interest charges, such as John Lewis at only 18.9% APR, or Next at 22.9% APR, will be harder to obtain if you have any credit issues as their applications will always decline bad credit users. The mid-range interest rates from 30% onwards will have lesser credit criteria and those with poor credit can easily obtain catalogues that offer instant credit. One of the larger and well-known catalogues that offer this is Fashion World, but their interest rate is at 58.7% APR. When paying off items purely by making monthly minimum payments and the interest at such a high rate, it will mean that over time you would have paid for the item twice over.
Some online catalogues such as BrightHouse and Dial a TV will sometimes require personal references, not as guarantors, but to help the finance department make a considered decision on your credit eligibility. These catalogues will not be able to offer instant credit as the referencing checks will take longer to complete.
As it can be very easy to open up online personal accounts with some catalogue chains, this is where many folks can get into trouble with their finances. An initial credit limit can be low, but if you have two or three catalogue accounts then you will find yourself owing more than you originally expected. Always consider the interest charges if you will not be paying your account in full each month. Online catalogues are just as easy to get you in financial trouble as any other credit line, and it should always be used responsibly.