Are catalogue and store card debts getting you down?
If debts you’ve built up on store cards, catalogues and instalment purchases are getting you down, you’re not the only one. In fact, nearly half of UK adults currently make use of some form of non-traditional credit*, and a proportion of these have fallen behind with the repayments.
What is non-traditional credit?
When we think of credit, we typically think of a credit card, overdraft or a loan from a well-known provider. However, there are plenty of other forms of credit on the market. For example, store cards that allow you to walk out of a shop with a new outfit and pay for it at a later date are a form of credit. So too are the agreements offered by some stores to purchase gadgets, appliances, furniture and other goods and then pay for them in weekly or monthly instalments.
Hire purchase or personal contract plans that let you drive away in a new car without paying for it on the day are another form of credit, as are the 0% finance or buy now, pay later deals some retailers offer. All of these are known as non-traditional credit, and it’s something a lot of people make use of.
Hitting the shops
Around one in eight shoppers take advantage of store cards when they’re in the mood for a spot of retail therapy, and these cards are particularly popular with the younger generations. More than a quarter of respondents aged between 18 and 24 years old use them – that’s over four times more than the number of over-55 year olds who shop with them.
Buying items online or through catalogues with credit is even more popular. Nearly a quarter of adults revealed they make use of this type of credit facility. And one in 10 said they are currently paying in regular instalments for some of the furniture, gadgets or appliances they’ve purchased.
They might be untraditional but all of these options are still credit. Not keeping up with the repayments can therefore put people at risk of building up a problem debt.
Of those who pay for items they have purchased in weekly or monthly instalments, two-fifths said they are at least a month behind with the payments. Meanwhile, a third of shoppers with store cards revealed they are a month or more behind with paying off the balance.
As with any debt, not keeping up with the regular payments can cause the interest to mount up. There might also be a charge for the missed payment added to your bill, which means you have to pay back even more.
If you keep missing payments, the amount you have to repay will keep climbing until it becomes difficult to manage. And if you owe money to more than one borrower, you could be left with a real problem on your hands.
However, there are solutions available. No matter what type of debt you have – traditional or non-traditional - if you’re finding it difficult to meet demands for payment from your lenders, you should consider getting help. There is advice and support available, along with a range of debt solutions, that may help you get back on top of your finances.*OnePoll questioned a nationally representative sample of 1,822 adults aged 18 and over between 25th February and 7th March 2014.
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