Catalogue and store card debt

Catalogue accounts and store cards make it easy to spread the cost of clothes, furniture or electricals. Interest rates can be high, and small monthly payments can hide how much the balance has grown. This guide covers what happens if you fall behind and how catalogue and store card debt is treated in a debt solution.

What is catalogue and store card debt?

Both are running-account credit: you have a credit limit, you buy goods, and you pay back a monthly amount. Unlike a credit card, you can only spend with that retailer or a small group of linked shops. The Financial Conduct Authority (FCA) calls this retail revolving credit, and it covers store cards and catalogue lenders. Because it is regulated credit, the FCA’s rules on affordability, arrears and collection apply.

Some catalogues also offer “buy now pay later” deals on the account. Read the terms: these are usually part of your catalogue credit agreement, not a separate BNPL plan from an app such as Klarna, and interest may apply if you do not clear the balance before the offer ends.

Is catalogue debt a priority debt?

No. StepChange treats catalogue debts as non-priority and says you do not have to give the items back if you fall behind. The lender cannot send bailiffs or take money from your wages without first getting a county court judgment. Pay your rent or mortgage, council tax, energy and any court fines first. Our guide to priority and non-priority debts explains why.

What happens if you miss catalogue or store card payments?

1. Arrears and charges. The company will ask you to catch up with missed payments, and charges may be added.
2. Default notice. Before closing the account and demanding the full balance, the lender must send a default notice giving you at least 14 days to put things right.
3. Default and account closure. StepChange says the account will default and close if you do not pay. The default stays on your credit file for 6 years from the date of default.
4. Debt collectors and court. The debt can be passed to a debt collection agency, and the creditor can take court action for a county court judgment.

If a collector contacts you about an old catalogue account you do not recognise, you can ask for a copy of the credit agreement before paying: see how to ask a creditor to prove a debt.

Do the persistent debt rules apply to catalogues and store cards?

Yes. The FCA’s persistent debt rules cover retail revolving credit as well as credit cards. If, over 18 months, you have paid more in interest, fees and charges than off the amount you borrowed, the lender must write to you, encourage you to pay more if you can and point you to free debt advice. If this continues to 36 months, it must offer you a way to repay within a reasonable period, and if you cannot afford that, it must treat you with forbearance, which may include reducing, waiving or cancelling interest and charges.

For store cards there is also a minimum payment rule: each month’s minimum must cover at least the interest, fees and charges plus 1% of the balance. Our credit card debt guide sets out each stage of the persistent debt rules in more detail.

How can you deal with catalogue debt?

• Stop using the account. Ask the company to stop further spending so the balance stops growing.
• Contact the lender. Lenders must treat customers in arrears or financial difficulty with forbearance and due consideration. That can mean lower payments for a period or stopping interest and charges. Offer an amount based on a realistic budget.
• Complain if you could not afford the credit. Before lending or raising your limit, a lender must make a reasonable assessment of whether you can afford it. If your limit kept going up while you were clearly struggling, you can complain to the lender and then to the Financial Ombudsman Service.
• Deal with all your non-priority debts together. If you also have cards or loans, a debt management plan combines them into one affordable payment. It is informal, so creditors do not have to agree or freeze interest.
• Ask about Breathing Space. In England and Wales, a Breathing Space pauses most creditor action and freezes interest and charges for up to 60 days while you get advice.

Can catalogue debt go into an IVA, DRO or bankruptcy?

Yes. Citizens Advice lists catalogues and store cards among the debts you can include in an IVA, and they can also go into a debt relief order or bankruptcy.

• IVA. A legally binding agreement under the Insolvency Act 1986, run by a licensed insolvency practitioner, usually lasting 5 or 6 years, with fees taken from your payments. Once it is approved, creditors bound by it cannot take further action over the debts included.
• DRO. A debt relief order is free and is for people with debts under £50,000, less than £75 a month spare, assets under £2,000 and a vehicle worth less than £4,000.
• Bankruptcy. Costs £680 and clears most unsecured debts, usually after 12 months, but can affect your home and other assets.

Each option has costs, conditions and effects on your credit file. IVA or debt management plan? compares two common routes for people whose debts are mainly catalogues, cards and loans. IVAs and DROs are available in England, Wales and Northern Ireland. In Scotland, see debt solutions in Scotland.

What to do next

1. Find your latest statement for each catalogue and store card, and note the balance, the arrears and the minimum payment.
2. Cover your priority bills, then contact each lender with an offer you can afford and ask it to stop interest and charges.
3. Get free, impartial debt advice from MoneyHelper, StepChange, Citizens Advice or National Debtline. An adviser can look at all your debts together: see where to get free debt advice.

For other kinds of borrowing, see types of debt. If you use our checker, we may pass your details to a licensed insolvency practitioner or debt adviser.