A catalog credit line can be an easy way for shoppers to purchase items on a payment plan. On the other hand, some applicants are confused when they realize that their applications were for credit lines for specific catalogs instead of for credit cards that can be used elsewhere.
Catalog Credit Line Explained
A catalog credit line is very similar to a credit card account. A line of credit is extended to the customer, who is then able to purchase items from the catalog without making payment in full. While some catalogs offer a series of equal installment payments, other catalogs extended a revolving line of credit so customers can make multiple purchases and make minimum payments until the balance is paid in full.
Credit lines are common with some specialty catalogs, particularly among catalogs that are not considered high end merchandise. Examples of these kinds of catalogs include Fingerhut and various candy catalogs. It is common for people to apply for credit lines with catalogs instead of applying for a credit card due to past credit issues. While some catalogs are more than happy to extend credit to customers with bad credit, it's more difficult for these same customers to apply for - and get approved for - a traditional credit card.
Catalog credit lines are only valid for purchases made with the specific catalog issuing the credit line. Lines of credit that are extended as credit cards, however, are different. When applying for a catalog credit line you want to make sure that you know what you are actually applying for. Will the credit line allow you to shop with a variety of different stores, or is the line of credit exclusive to one catalog? Don't apply for a line of credit until you first read the fine print so you know what you are getting yourself into.
Potential Issues
Some lenders use catalog credit lines as a source of revenue while attempting to deceive some applicants. The fact is that some people do not realize that the application they fill out is only for a catalog credit line as opposed to an actual credit card that can be used for purchases like a traditional Visa or MasterCard.
It is important to remember that not every credit line offered by catalog companies is an attempt to deceive applicants. You can avoid applying for something that you don't fully understand by always reading the terms and conditions and asking plenty of questions. Don't wind up with a credit line for a catalog if what you're looking for is an actual credit card.
Interest
Whether or not you are charged interest for a credit line depends on the terms and conditions of the account. While some catalogs allow customers to make interest-free payments for purchases, other catalogs charge fees or interest rates for balances carried.
Read the terms and conditions of the credit line to find out what interest rate and fees are charged, if any.
Credit Reporting
Not all credit lines offered by catalog companies offer reporting to the major credit bureaus. In fact, some catalog companies don't report account activity unless the customer falls delinquent with payments. This does not mean that a catalog credit line can't be a viable first step in establishing or rebuilding credit, but you should be aware that timely payments may not be reflected on your credit bureau at all. This means that paying your credit line on time may not increase your credit score.
Speak to your catalog credit line representative to find out if your account activity is reported to any of the major credit reporting agencies.
Apply for a Credit Line
Catalogs make it easy to apply for a credit line. Check your favorite catalog to find out what phone number you can call to apply or what website you can utilize for a quick credit decision.
