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4 Things to Consider Before You Open a Credit Account

by Carlton Whitfield. Published Mon 02 Nov 2015 15:13

Catalogue shopping is becoming more popular as consumers shun the shopping malls and choose products from the comfort of their home. The process is simple: individuals can browse through a catalogue, select their items and have them delivered directly to their property.

They can also pay for their order in affordable chunks. But if you've never opened a credit account with a catalogue company before, there are a few things you should know. Here are the factors you need to consider when choosing catalogues with credit.

1. Watch out for interest

Yes, pay monthly catalogues allow you to pay for your item in small instalments over a period of time. The catch? You could end up spending more on interest. A good place to start is to use a catalogue comparison website, where you will be able to compare different interest rates in one place. Remember - some retailers will enable you to purchase products interest-free, as long as you make full payment within a particular period (this is usually 28 or 30 days). If you don't pay by this date, then you will start to accrue interest.

2. Do your research

There are a plenty of catalogues out there - do your research to find the right one for you. Ask yourself the following questions: What products are you looking for? How do you want to make repayments? Weekly? Monthly? Is the time it takes to ship the item important to you? What about the returns policy? Answering these questions will make it easier for you when deciding on the right catalogue company for you. Check out third-party review websites to establish the reputation of the business.

3. Check your credit report

Most retailers will carry out a catalogues with credit check when you open a new account. That means that applying for credit (and subsequently being rejected by catalogue companies) could have an impact on your credit rating. Although you will be given an instant decision about your application approval in most instances, it can sometimes take longer for the company to check your status. If you have been rejected, you might want to check your credit report from one of the leading credit reference agencies. This will enable you to check your overall credit history, as well as any credit agreements you have had in the past with other lenders.

4. Make repayments on time

Failing to make repayments on time might mean that you are charged a penalty or higher interest on your credit account. To avoid this, find out about the easiest ways to repay before you open a new finance account. You will usually be able to make repayments in the mail, by calling a customer rep on the phone, or by logging into your account on the company's website. You will usually receive a statement in the post from the company to remind you, including information on the minimum amount you will need to repay for that particular billing period. If you are unsure about how much you have to pay, contact the company directly; a staff member should be able to help you.


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