If you’re trying to climb your way back up from a poor credit score and build up a better credit history, then you’ve probably stumbled across catalogue credit accounts.
One of the first things you’ve probably wondered is whether they’re actually beneficial to have or whether it’s too good to be true. After all, you’re shopping and also bettering your credit, so are there any catches?
While catalogue credit accounts can, in fact, help you build up your credit score to help with future loans or payments, they’re not great for everyone. Today, we’ll take you through all the pros and cons of catalogue credit accounts, so you can decide whether it’s the right choice for you.
So, let’s get into it!
What are catalogue credit accounts?
Catalogue credit accounts are designed to help users shop instantly without having to pay up front, all the while building up their credit score every time they borrow and pay back on time.
It’s a great way to buy what you need in the moment and pay it off weekly or monthly, so you don’t have to wait till you can afford to pay for an item in one go. Most people use these for occasions like Christmas, when buying expensive products, so they don’t have to wait and save up.
Many catalogue accounts sell a wide range of products, spanning from electronics and homeware to toys and clothes, so you can use the credit to buy anything you need, as long as you can afford to pay it back by the due date.
If you want to browse some catalogues in the UK, read our blog on the biggest list of UK catalogue companies.
The pros of instant credit catalogues
Instant credit catalogues come in handy for a lot of people, as they provide a flexible way to buy household essentials, clothing, appliances, furniture, or unexpected purchases that can’t wait till payday.
Here are the main ways they can benefit you:
1. You can spread the cost of purchases
Catalogue credit accounts allow you to spread the cost over time with options to pay weekly or monthly, depending on the catalogue provider and the repayment option you choose.
Life happens, and we can find ourselves in tight situations with unexpected bills, so if you don’t have an emergency savings, catalogue credit comes in handy if your washing machine breaks, your child needs new school clothes, or you need to replace a household item quickly.
2. Most offer quick decisions
When you apply for a catalogue credit account, you aren’t waiting a long time as you would for a loan.
Most of the time, you’ll get a decision within minutes. Once approved, you may be given a credit limit and start shopping straight away, though this depends on the provider.
If you have bad credit, you may still be accepted by some providers, but your limit may be lower to begin with.
3. Some catalogues offer flexible repayment options
A lot of providers offer various repayment options, including weekly payments, monthly payments, buy-now-pay-later options, or instalment plans over a set period.
It offers more flexibility and suits both those who are paid weekly and those who prefer to budget around payday every month. Some catalogues may also offer interest-free periods, where you can avoid interest if you clear the balance within a certain timeframe.
4. It may be more accessible than some other forms of credit
If you have a poor credit history, you’ve probably been turned away from a lot of loans or credit cards, which can be disheartening to say the least.
The good thing about catalogue credit is that most providers offer it to those with a poor credit history to help them build a better score. They may offer a smaller starting limit, but this can be increased later if the account is managed well.
5. It can make budgeting easier
For some people, smaller, regular repayments are easier to manage than a single large payment.
If you’re paid weekly or monthly, catalogue credit can help you plan purchases around your income and spread the cost more predictably, which is useful during periods when money is tight.
You can choose what you pay and when, as long as you pay in time, which should make managing rent, bills, food, or other priority costs easier.
6. It could help build your credit history
Building on point 4, using your catalogue account responsibly may help you build a better credit history over time.
Making payments on time shows that you can manage credit reliably, which can show a pattern of borrowing and repayment, helping you appear more responsible when applying for loans or credit cards later down the road.
The cons of instant credit catalogues
While, yes, catalogue credit accounts can be a big help for those who need some help buying items without paying in one go, it doesn’t come without risk.
Before applying for an instant credit catalogue, it’s worth understanding the possible downsides.
1. Interest can make items more expensive
One of the biggest drawbacks of instant credit catalogues is the cost of interest.
If you don’t pay on time or you aren’t given an interest-free period, then the final amount you pay could be much higher than the original price of the item, which can quickly put you in more debt.
That’s why it’s important to look beyond the monthly repayment and check the full amount repayable.
2. Missed payments can affect your credit score
If you fail to make a payment altogether, this can be recorded on your credit report, which may make it harder to get accepted for credit in the future.
A missed payment could also lead to extra charges, more interest, and letters or calls from the provider. If the account remains unpaid, the debt could be passed to a collection agency, which can make the situation feel more stressful.
3. It can encourage borrowing for wants rather than needs
If you have a history of overspending or you’re given a big credit limit, it can be tempting to spend it all at once, and spend it on things you don’t need.
Fashion, homeware, electricals, and seasonal deals can all feel more affordable when the cost is split into small payments, but it all quickly adds up, and if you don’t manage it well, you’ll be left dealing with the consequences of paying it all back on time.
4. The total cost isn’t always obvious at first
A catalogue account may show an affordable weekly or monthly repayment option, but that doesn’t always tell the full story.
You also need to check the APR, repayment term, delivery charges, late payment fees, and whether interest will be added if you don’t clear the balance by a certain date.
If you don’t have the means to deal with these things, then a catalogue credit account might not be the best option for you.
Find the best catalogue for you
Now that you’ve weighed up the benefits and downsides of catalogue credit accounts, we’re here to help you find an option that suits your financial situation.
At Catalogues Bad Credit, we make it easier to compare catalogue options in one place, including choices that may be suitable for people with poor credit or a limited credit history.
Ready to explore your options? Compare bad credit catalogues today and find a repayment option that works for you.