Minimum payments to catalogues
Making regular payments to catalogues each month helps you clear the balance, however you’ll usually only be asked to make a minimum payment each month.
Paying just the minimum payment to a catalogue might not cover the interest and repayments. This can cause the debt to build up and become hard to manage. You're also at risk of your account being in 'persistent debt'.
Catalogue accounts and persistent debt
if you’ve been making minimum payments for a while, you may have recently received a letter telling you that your account is in 'persistent debt'. They may have asked you to increase your monthly payment.
Have you received a letter from your lender warning you that your catalogue account is in 'persistent debt'? Find out what this means and what you should do.
After 18 months of persistent debt
You’ve repaid more in interest and charges than you have towards your balance over the past 18 months. At this point, your catalogue company will contact you. They’ll encourage you to take action so that by month 36 (i.e. 18 months’ time), you no longer have the persistent debt.
After 27 months
You’ll be contacted again by the catalogue company if your account remains in persistent debt (in other words you have only made minimum payments). Once again they’ll encourage you to take action.
After 36 months
If you still have a persistent debt on your account, the company should offer you a way to pay this off within three to four years. They may suggest:
- An affordable payment plan so you can clear the debt quicker or
- Clearing the debt altogether by using a credit product, such as a loan or credit card
If these aren’t suitable, they’ll consider other options such as suspending interest and charges, or reducing your account’s minimum payment. This may involve suspending your account, and could impact your credit file.