What is a catalogue company?
A catalogue company is a retailer that promotes its products through a catalogue – either a hard copy posted to your address or as a website. Some catalogue companies have a physical catalogue they send out and a website.
Consumers who purchase from a catalogue company can choose to purchase products by paying in full, just as they would buy products from any other retailer.
However, catalogue companies also offer consumers the option to spread the cost of a product over many weeks or months.
When you choose to spread payments for a product over instalments, the catalogue company will add interest to payments, so you end up paying more for the product.
What is a catalogue debt?
A catalogue debt is when you owe money to the catalogue company because you’ve chosen to spread payments over several instalments instead of paying for the product in full. You have a debt to the catalogue company until you have made all the repayments necessary.
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There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.
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How do catalogue repayments work?
Catalogue repayments usually require an initial payment at the time of purchase as well as the fee for delivering the product to your address.
You’ll then be required to make weekly or monthly catalogue payments to the catalogue company until the debt (and interest applied) has been cleared.
Can I just make the minimum payment on my catalogue debt?
Yes, it’s possible to make a minimum payment towards your catalogue debt. But paying more towards the debt when possible will clear the debt quicker and could save you money on interest.
Moreover, if you only pay off the minimum each month, you could fall into something known as persistent catalogue debt.
What is persistent catalogue debt?
Persistent catalogue debt materialises when you keep making minimum payments towards your debt but due to interest and charges applied, you’re not making significant or any progress at clearing the debt.
In other terms, your minimum payments are paying off the monthly interest – and possibly charges – but they’re not causing your debt to decrease.
If you have gotten into a cycle of persistent debt like this, you can find valuable support and information back on our debt info page.
What happens if I have persistent debt?
If you have persistent catalogue debt the catalogue company will write to you and make you aware of your situation.
After 18 months of persistent debt, the catalogue company will encourage you to find a solution so you start making repayments that go beyond just paying monthly interest and charges.
They expect you to make changes that will clear the debt within the following 18 months of the letter, but they will get back in touch nine months later for further encouragement.
If the full 18 months pass and you still have persistent debt, the catalogue company is supposed to suggest solutions, such as using other credit to clear the debt, agreeing to a smaller repayment plan and/or freezing interest and charges.
The solutions proposed should get you out of the debt within four years maximum. Your credit rating will be damaged by some of the actions suggested.
Could you write off some debt?
- Affordable repayments
- Reduce Pressure from people you owe
- One simple monthly payment
Pros and cons of using catalogue credit
There are benefits and drawbacks of utilising catalogue credit to make your purchases. We‘ve highlighted the main ones below:
Pros of using catalogue credit
- You can spread the cost of purchases to make the products more affordable for you
- You might benefit from an interest-free introductory period
Cons of using catalogue credit
- Catalogue debt usually has a high rate of interest
- You end up paying more for the product than saving and paying for the product upfront – unless you manage to pay it off during an interest-free period
- Using catalogue credit can give you a false sense of financial stability
Catalogue companies
There are scores of catalogue companies to choose from, especially considering many of them offer identical products. We have written about some of the most popular catalogue companies, which you can read about here.
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What happens if I miss a catalogue payment?
If you miss a catalogue payment, you’re likely to receive a communication from the catalogue company asking you to make a payment and catch up. They might give you a deadline to make this payment.
What if I don’t pay catalogue debts?
If you don’t pay your catalogue debt, the catalogue company can register the account as defaulted and send you a default notice. The company can then take further action to get you to pay.
One of the things the company might do is outsource the debt recovery process to a debt collection agency.
This type of debt collection business isn’t a bailiff and they don’t have any additional powers than what the catalogue company has itself. But the company will be more persistent in trying to get you to pay, usually with calls, texts and letters.
You should also expect legal threats from the catalogue company or any debt collection agency working on its behalf.
Can the creditor take me to court over my catalogue debt?
Yes, the catalogue company can take legal action to try and make you pay.
The company will usually ask the County Court to order you to pay with a County Court Judgment (CCJ). Unless you challenge the claim, a CCJ will be issued and you’ll be legally obligated to clear the debt.
If you don’t pay the debt off or agree to a new affordable payment plan with the catalogue company, the company can go back to court and ask for permission to use further action to enforce the debt.
Can bailiffs come for catalogue debt?
If a CCJ has been issued and you’ve failed to pay, the catalogue company can ask the court to enforce the debt with enforcement agents, commonly known as bailiffs.
A bailiff will ask for payment or a payment plan, and if you cannot provide this they will look to take possession of your goods, which could then be sold to clear the debt. Dealing with bailiffs is stressful, and it’s only made worse because they charge expensive fees that get added to your debt.
The catalogue company might use another debt enforcement method instead of bailiffs, such as having deductions taken from your employment or benefit income to repay the debt over time.
How do you deal with catalogue debt?
The only way to deal with catalogue debt is to pay it off. If you cannot pay off your debt as normal, you could consider paying it off by including the debt within a debt solution.
A debt charity can assess your situation for free and recommend the most appropriate debt solution for your needs.
Catalogue debt is a non-priority debt, so you should always prioritise repaying essential costs such as household bills before repaying these debts. But that doesn’t mean you should ignore them.
How to pay off catalogue debt
To pay off catalogue debt you need to at least make a minimum payment.
But if that isn’t possible, you could pay off your catalogue debt by including it within one of the following debt solutions:
- Debt Management Plan (DMP) – preferably with the interest and charges frozen
- Debt Relief Order (DRO)
- Individual Voluntary Arrangement (IVA)
- Debt Arrangement Scheme (Scottish residents only)
Or you could use a debt mitigation strategy, such as debt consolidation.
Can I transfer catalogue debt to a credit card?
You might be able to transfer your catalogue debt to a credit card and save money on interest payments. If you transfer multiple catalogue debts, this would be known as debt consolidation.
If your catalogue debt interest-free period is coming to an end, you may be worried about high interest that could be applied to your debt. To avoid this, you could consider taking out a credit card with an interest-free or low-interest introductory period.
You could then use the credit card to pay off your catalogue debts, thus saving you money on future interest payments!
Can I have catalogue debts written off?
Yes, it’s possible to use some debt solutions to write off part or all of the money owed to a catalogue company, such as an IVA or DRO, respectively.
You could even ask the company to write off your catalogue debt. They may be more willing to do this if you have persistent catalogue debt and they’ve already written to you to encourage you to find a solution. But the company doesn’t have to write the debt off.
What happens if I don’t pay Littlewoods?
If you don’t pay a Littlewoods catalogue debt the company will register the account as defaulted and stop you from purchasing any more products at Littlewoods.
They will take further action to recover the debt, such as using debt collection agencies and taking legal action to make you pay.
What happens to catalogue debt when someone dies?
Catalogue debts cannot be passed on to someone else when the debtor passes away unless the catalogue debt was in a joint name. In the latter’s case, the debt would become the sole responsibility of the surviving debtor.
The catalogue debt would be repaid from the deceased’s estate. But if there is no money or assets in their estate, the debt would not be paid back, but it wouldn’t be anyone else’s responsibility to repay.
What can I do if someone has taken out a catalogue in my name?
If someone takes out a catalogue debt in your name you should contact the catalogue company to let them know immediately. You should also contact Action Fraud.
You can see if someone has used your identity to access credit by checking your credit file.
Can I cancel my catalogue debt?
You have the right to return goods bought through a catalogue company within 14 days of receiving them.
Cancelling catalogue purchases entitles you to a full refund and you therefore won’t have a catalogue debt regarding this particular purchase.
Where can I get catalogue debt advice?
You can receive free debt advice from debt charities like National Debtline and StepChange.
These organisations provide confidential and detailed advice based on your circumstances, which ensures you choose the most advantageous method to get out of debt. Sometimes they will even set these solutions up for you.
Are you struggling with unaffordable debt?
- Affordable repayments
- Reduce pressure from people you owe
- Lower monthly repayments
Alternatives to catalogue credit
Instead of using catalogue credit, the best way to buy products and guarantee you won’t get into debt is to save money and buy the item outright.
Making purchases outside of your immediate financial reach puts you at risk of getting into debt because you never know how your income could change in the future.
Although this might make some products unaffordable today, it could save you a lot of money over the long term.
Are you struggling with debt? 