Credit is credit, and debt is debt. Profound I know.
More and more, and in part due to the lock downs, we began making our purchases as consumers online; the way we bought items changed, and for some the way they were extended credit.
For many making purchases online was the way to go, use your credit or debit card, and buy what you like or need. However, not everyone qualifies for or has use of a credit card. Couple that with the fact you may not have the cash in the bank to use your bank or debit card to make a purchase, then what can you do???
Enter the old fashioned but updated world of catalogues.
In the past you may have received an actual paper catalogue, but today, many catalogue companies are online, you shop via the web.
These catalogue companies offer various products, some offer everything you could want, and you can shop from the confines of your warm and comfortable home. And you can make payments each month, so no upfront lump sum charge or cost.
Need a laptop and a (insert item here), be it a rug, bedding, toys for the kiddies, you name it, if it is on the catalogue or on the web site, you can buy it. And make payments.
But don’t think these catalogue companies are not extending credit, because they are. They are offering you the ability to purchase items, and make payments, and all for a price, and that price is interest. Catalogue companies are high risk lenders, and as such the interest rates are high.
In addition, while many have a great selection of items to sell and for you to buy, it is only what they sell, you are a captive buyer.
Is this a bad thing, are catalogues bad….no. They fill a void and offer credit to many who may not have access to credit.
In most instances a credit check is done, and even with poor credit someone may be offered a low credit limit to make purchases. And yes it is a credit limit, like a credit card, a revolving credit line.
And should you struggle to repay the amount you owe, it can affect your credit and credit score, and there can be collection efforts to collect what is owed.
The interest rates may be high, but catalogues do offer a way to easily make purchases from home, we just need to be aware of exactly what they are, credit.