Source: www.rew-online.com
There are both benefits and negatives to buying on finance, and you will need to weigh up the pros and cons before opening a new credit account with a company for the first time. For example, buying on finance will enable you to spread the cost of the item over several months, although if interest rates are high, your purchase could cost you more money in the long run.
Getting Accepted
Getting accepted for a credit plan is a struggle in itself for some people, especially those with bad credit. For those who struggle to get accepted for a bank account, tend to have very bad credit and need to start working on improving this immediately before applying for more finance.
Basic bank accounts with a CreditBuilder facility are ideal as they help improve your credit rating without the risk of borrowing. For more information on this, visit www.getabank.co.uk.
Here are some of the benefits and negatives of buying on finance, with a catalogue company, as an example.
Negatives
When opening a new credit account with a catalogue company a credit check will normally take place in order to further your application. However, many catalogue companies still allow those with a poor credit history – or no credit history – to apply, and a decision will be based on your ability to make repayments for any purchase in the future.
The amount of interest that will be charged by the catalogue company will vary, so it’s always a good idea to do your research and find a service that offers the best rates of interest. Companies that charge a high rate of interest will see you paying more money for a purchase in the long run. However, some companies offer their customers an “interest free period”, where they will not be charged interest as long as they pay for a purchase in full by a certain time, for example within three or six months.
Benefits
One of the main benefits of applying for a credit account with a catalogue company is the ability to spread the cost of any items you purchase over a period of time, which can make it easier to budget and control your finances more effectively. You will receive a monthly statement from the company, outlining your full balance, the items you have purchased during the billing period, and the minimum monthly repayment you will need to make. You can then either make your repayment by speaking to a customer representative over the phone or by logging into your online account on the company’s website. Some catalogue companies like Next or BrightHouse even allow you to make repayments by visiting a local branch on your nearest high street.
Ordering from a catalogue company also gives you a great amount of choice, with many products that you normally wouldn’t be able to find on the UK high street. Companies like JD Williams for example provide clothing for plus-sized women, and feature many famous fashion brands.