Catalogues are known ways for purchases where you want to spread the costs over several payments. This helps you afford expensive purchases. However, catalogues are costly most of the time and may have high-interest rates.
Several of the catalogue companies let you spread your payments on a certain period. This comes with an interest rate, making you pay more. When making the minimum payment, this payment goes to your interest. Thus, it’s important that you pay more than the minimum if you want to pay off your debt faster.
What If I Don’t Pay Catalogue Debts?
If you missed catalogue payments or the minimum payments each month, the company will urge you to keep up with the payments. Failure to make payments, allows the company to put your account on default. They can also take action to recover the debt. Additionally, your account with the catalogue company is going to be closed, making it impossible for you to make purchases. Your creditor is likely to consider debt collection process to recover the debt.
Moreover, your debt can be forwarded to a debt collection agency and your creditor can seek legal action against you. A CCJ or County Court Judgment may be considered by your creditors if you keep on ignoring your debts.
In contrast, catalogue debts are treated as a non-priority debt. Thus, it shouldn’t be a priority over your household expenses or other living costs. It differs from other types of agreements such as the HPA or hire purchase agreement, where you have to return the items if you are delayed with payments.
Paying Minimum to Catalogue Debts
Keeping up with your catalogue payment each month allows you to clear your debts earlier than expected. Though you are only asked to make the minimum payment each month, paying more than the minimum can help you get out of debt faster.
This is because paying the minimum might not be enough to cover the repayment with interest. Also, it can lead to your debts being piled up, making it difficult for you to manage. Besides, you will also be at risk of being in persistent debt.
Catalogue Payments and Persistent Debts
If you’ve been making a minimum consistently, you might get a letter informing you that your account is in persistent debt. In this case, you will be asked to increase your debt payments.
Here’s a guide below on what’s going to happen if you keep on paying the minimum payments for your catalogue debt.
After 18 months of persistent debt:
After 18 months of paying the minimum amount, you haven’t covered your balance over this period. The payment you’ve made goes to the charges and interest. Your catalogue company is likely to reach you and encourage you to take action to avoid persistent debt on the 36th month.
After 27 months:
On the 27th month, if your payment history remains the same, meaning you were just making the minimum payments, the catalogue company will request to increase your payment again.
After 36 months:
If you’re still in persistent debt, the company will reach out in giving your alternatives to paying off your balance within 3 to 4 years. They may suggest a convenient payment plan that will wipe out your balance faster. They may also suggest paying it off through a loan or a credit card. When the options offered aren’t affordable or realistic for you, they may suspend interest and charges or even reduced your monthly payment. This can include suspending your account, which can affect your credit.
Canceling Your Catalogue Purchases
Once you ordered goods and later on changes your mind, you have the right to return it. So, in case you realized that you can’t afford to pay for your purchases, you can cancel the order any time for up to 14 days after the receipt.
Returning your purchases may be free or in most cases, you may have t cover the postage expenses to send it back. However, these costs will be much cheaper as you’ll be paying each month. Moreover, if goods are not satisfactory or damaged, you can always get a refund or if not a replacement.
How to Deal With Your Catalogue Debts?
When barely coping up with your catalogue payments or worried bout your creditors taking actions against you. We are happy to help. Our debt experts can give you useful advice on how to deal with your catalogue arrears and all other types of debts. Do not hesitate to use or FREE debt advice tool online.