Finding the best pay monthly catalogue for you
Pay monthly catalogues allow you to spread the cost of purchases. Learn more about how they work and if they’re right for you with our guide.
What are pay monthly catalogues?
Pay monthly catalogues allow you to purchase goods with credit online and then pay in instalments for your online shopping.
For some, spreading the cost can make an item more affordable, Instead of a large, one-off sum, you can pay in small, more affordable instalments.
Most catalogues will ship your item within five days after checking out. Pay monthly options are offered by the majority of major shopping catalogues and are commonly used to purchase large, expensive goods.
How do pay monthly catalogues work?
Pay monthly catalogues allow you to purchase items but not pay for them upfront. You’ll usually need to take out a credit account with a shopping catalogue to be able to pay this way.
Credit means you can borrow money with the intention of paying it back at a later date. Many pay monthly shopping services will give you a credit limit – this is the maximum amount you can borrow on your account. This limit is usually a lot lower than standard credit cards issued by banks.
When completing your purchase, some catalogues may give you the option to pay an initial amount, others may allow you to complete the transaction without paying anything for a certain period of time.
The majority of monthly payment catalogues will charge interest on your purchase. However, the way they add this interest could alter, depending on their unique deals, promotions and incentives.
Some pay monthly catalogues won’t charge interest up to a certain date. This means if you fully pay off what you owe, there won’t be any extra to pay on top.
However, if you have an outstanding balance after the agreed date, you’ll be charged interest on top, with the industry average being 39.9% APR.
If you’re using a catalogue that doesn’t charge interest and late paying what you owe, the provider will likely switch your repayment plan to one which will charge interest.
Shopping catalogues will need to check how you’ve managed money in the past so will do a soft credit check on you, which is unlikely to affect your credit score.
If you have bad credit, a catalogue may still allow you to create a credit account, however, they may charge you more interest than their representative 39.9% APR.
When using the buy now pay monthly service offered by shopping catalogues, you should have the option to select your monthly repayment amount, with a minimum and maximum amount to pay.
If you decide to pay the minimum amount, many catalogues will add interest from the start of your repayment plan. This means it will take longer for you to repay your balance, and you may end up in a position of consistent debt – which is where your repayments aren’t enough to keep up with the interest.
Most buy now pay monthly catalogues take up to two years to fully pay off, making them a long-term commitment.
What are the benefits of pay monthly catalogues?
When managed well, there are benefits to be had with pay monthly catalogues. These include:
Credit options available to people with bad credit
If you have a bad credit score, it can be difficult to obtain credit, which can put you at a financial disadvantage. Pay monthly catalogues give you the chance to build your credit rating because they’re more likely to offer credit to high-risk customers.
Some catalogues may choose not to check your credit history. Instead, they’ll ask if you have a UK bank account and review that to decide if they’re willing to give you credit.
If you’re able to get an account with bad credit, be aware you’re likely to pay a larger amount of interest than the advertised representative APR, which means it will take you longer to pay off what you owe.
Can build or improve credit
Because pay monthly catalogues operate by giving you credit to purchase goods, you have the chance to build up your credit rating every time you make a repayment.
A good credit score gives you more options on who to borrow from and how much.
Building credit via a monthly shopping catalogue can also be easier to manage because the amounts you’re dealing with are typically small.
Although pay weekly catalogues can be a way to build your credit rating, if you miss repayments or are late paying, your credit score may be negatively affected.
Can be more affordable for essentials
Household essentials can be expensive, and if you need one quickly in an emergency, you might struggle to pay for it upfront.
Paying off an item monthly via instalments can make goods more affordable. Because the repayments are always on the same date each month, it can be easier to budget for.
What are the disadvantages of pay monthly catalogues?
Wherever credit is involved, there are likely to be risks, and monthly payment catalogues are no different. The risks include:
The interest rates you may have to pay when using pay monthly shopping catalogues are some of the highest offered by credit providers, at 39.9% APR. In comparison, credit cards offered by banks charge an average representative APR of 19.62%.
Even credit cards for bad credit, which have an increased APR due to the greater risk of giving credit to people with poor scores, are on average, set at 34.9%.
Minimum spend required
Most pay monthly catalogues will only offer you credit if you spend a certain amount. For some of the top pay monthly catalogues, this price can be as much as £150.
This could mean you’ll be tempted to buy expensive items in order to activate this payment option.
Has the potential to cause debt
It’s not uncommon for people who have used monthly payment catalogues to get themselves into debt. This happens when they only pay the minimum repayment amount, which isn’t large enough to cover the added interest that’s growing each month.
That’s why shoppers choose to pay more than the minimum amount to avoid getting into unmanageable levels of debt.
Are there any alternatives to pay monthly catalogues?
There are alternatives to pay monthly catalogues.
Pay weekly catalogues
Pay weekly catalogues are very similar to pay monthly catalogues, with the key difference being that instead of paying every month, you pay each week.
This payment option is likely to be offered by the same catalogues that offer monthly repayment plans and should have the same interest as their monthly options.
Credit cards for bad credit
If you’re using pay monthly catalogues because they offer credit options, you may want to consider credit cards for bad credit. These charge smaller rates of interest – although still expensive, averaging at 34.9%.
You may also get given a larger credit limit when using a credit card for bad credit, but they’ll have more restrictions than regular credit cards.
What are the best pay monthly catalogues?
The best pay monthly shopping services are the ones that offer interest-free periods. Having these periods gives you the opportunity to fully pay off your balance without incurring interest, saving you money as a result.
The best pay monthly catalogues offer promotions and deals such as 20% off the price of your first purchase. Catalogues should be transparent about their process, making it clear about how much you have to pay and for how long. There should be no hidden fees or charges.
Pay Monthly Catalogues FAQs
Do I have to pay interest on pay monthly catalogues?
It’s likely you’ll have to pay interest when using pay monthly catalogues. There are some that offer interest-free periods, so if you repay the full amount by this date, you’ll avoid paying interest on top of your purchase.
Depending on your minimum repayment amount, you may have to pay interest for the entirety of your repayment plan.
Can I get a pay monthly catalogue with bad credit?
Pay monthly catalogues should allow you to create an account even if you have bad credit.
If you’ve been accepted despite having bad credit, it’s likely the interest you’ll pay will be higher than the APR advertised.
Do pay monthly catalogues have minimum purchase amounts?
Yes, most pay monthly catalogues have a minimum amount they want you to spend before offering you credit. Typically this stands at around £150 but could be higher or lower depending on the provider you choose.
Will a pay monthly catalogue affect my credit score?
Creating an account with a pay monthly catalogue shouldn’t affect your credit score. Even if your provider looks into your credit history, this should be a soft search and won’t affect your score.
If you’re late paying or miss a repayment, your credit rating may be harmed. By making your repayments on time, you’ll be able to improve your credit score.
What happens if I miss a payment?
Missing your repayments comes with consequences. If you’re not yet paying interest and miss a payment, your plan may automatically change to one that charges interest. This means you’ll end up paying more for your purchase.
Missing payments may also negatively affect your credit score, making it harder for you to obtain credit in the future.
Many catalogues will also charge you a late fee, which will be added to your total balance.