All About Catalogue Credit Limits and Credit Limit Increases
Find out all about Mail order Catalogue Credit limits and how Catalogue credit limits work.
What is a Catalogue Credit Limit?
When you open your home shopping mail order catalogue with a credit facility you will offered a Credit limit.
This Credit limit is the maximum amount of Credit (or money) you can owe your Catalogue company at this time.
You can use the Credit limit to place orders on one or multiple items either in one go or as a combination of orders as you need to place orders
Your Mail order catalogues credit limit is variable, which means your Catalogue company may increase your Credit limit, in rare situations your Mail order Catalogue company may freeze or even reduce your credit limit.
What if my order exceeds my Catalogues credit limit
If you are looking to place an order with your Mail order Catalogue that is higher than the Credit limit on your Catalogue you will have 3 options.
You can use the available Credit and pay the remainder of the balance (the difference between your order total less your available Credit) by using a Debit or Credit Card.
You Could contact your Catalogue company and request a Higher credit limit, different Catalogue companies will have different policies on this, some Catalogue companies will not accept requests for Credit limit increases for example.
You could wait until your Catalogue company increases your Credit limit.
To find out how to apply for a Catalogue Credit limit increase and how to increase your chances of a Credit limit increase please read here.
You can wait until your Catalogue Credit Limit increases.
When do Catalogue companies increase credit limits?
Catalogue companies regularly review their customers Credit Limits.
Some Catalogue companies will require customers to pay on time for six months before they will consider a Credit limit increase, where as others may increase your Credit limit from the Second Catalogue Statement.
More often that not, customers who place orders with their Catalogue company will find credit limit increases faster than those who don't place orders.
Catalogue companies will often increase customers credit limits when a customer has been with them for a few months and is making payments on time.
Catalogue companies like to see activity, However, We are not saying buy as much as you can just to try and get your Credit limit increased
Instead, try placing an order with your Catalogue and make sure you are keeping up with the repayments on time, this will give you the best opportunity to get Credit Limit Increases
What are the Benefits of Catalogue Credit Limit Increases
As well as the additional Credit line available, having a higher credit limit is good for your Credit rating.
This will have a positive effect on your Credit rating and by ensuring you are keeping up with your credit agreements elsewhere, overtime this will have a positive impact on your Credit rating.
That of course is only true if you are keeping up with all of your Credit Agreement repayments on time and keeping your affairs in good order.
Catalogue companies report your repayments and account behaviour back to the Credit Reference agencies monthly.
So running a Catalogues well will help improve your Credit Rating and Credit Score.
Can I ask my Catalogue for an Increase?
Some Catalogue companies do can review Credit limits manually. This means you can call your Catalogue company and speak with them, Littlewoods and Very do this for example.
However, most Catalogue companies have an in-house department who will review your account to see if you qualify for a Credit Limit increase and won't be able to process a request manually on the phone.
Can I refuse a Credit Limit increase?
Yes, Catalogues are just like most Uk financial services, they have a code of conduct which includes being responsible with Lending.
If you feel your new higher credit limit is beyond your affordability/financial means or would limit you being able to get Credit elsewhere due to the availability of Credit you can give them a call and request they reduce it back to your original limit.
How long will it take for another Credit limit increase
Some catalogues will increase your Credit limit several times a year. Usually these Credit Limits will rise by a few hundred pounds at a time. Other Catalogue companies will offer bigger Credit limit increases at a slower pace.
It's not unusual for a Catalogue Credit limit to run into several thousands of pounds!
Will a Catalogue company Credit Check me for a Credit Limit Increase?
If you call up your Catalogue company or E-mail them asking for a Catalogue credit limit increase the chances are they will carry out a credit search. However, that being said, if you are offered a credit limit increase by a Catalogue company they are not going to carry out a Credit Search against you.
Will a Credit Limit increase be available straight away?
This will depend on your Catalogue company. Next for example offered us a new Credit limit of £3750 from our original credit limit of £100, this increase was to be offered automatically on our next statement or we could accept the new credit limit by calling in or logging into the Next website.
Other Catalogue companies apply the new credit limit instantly. This has been the case on Freemans, JD Williams and Very who have all increased our Credit limit without us having to do a thing.
Catalogue companies may be watching your Credit Rating…
Catalogue companies can also review how you are doing financially with your other financial agreements such as your pay monthly Mobile Phone contract, Credit Card, Utility bills, and any Loans etc.
Catalogue companies may be receiving a monthly feed from the Credit Reference agencies allowing them to see if you are managing your Credit well elsewhere.
If you are, they are more likely to offer you a Credit limit increase.
That means by keeping up with your repayments on these Credit agreements it will help demonstrate that you are not financially stretched and can afford more credit, thus giving you a greater chance of receiving a higher credit limit with your Catalogue company
The Disadvantage to that of course is obvious if you are currently paying bills late.
Customers who are not keeping up with repayments on other credit agreements could see Credit limit increases limited or increases refused and even find their catalogue credit limit reduced.
Catalogue companies are happy to extend Credit when you are in a position to be able to afford the items you are buying.
No Catalogue company wants to push you into a situation that you cannot keep up with the monthly repayments.
My Credit Limit has been removed
One Catalogue company (Next) does have a Credit Limit Suspended function. If they see a major change on your Credit report that indicates your financial circumstances have changed they can Suspend your Credit limit or reduce it down every time you make a repayment.
In our own experience this is a temporary measure.
We took out Car finance and Next suspended our Credit limit for around four months, after this period was over our Credit was reinstated and our Credit limit was increased to nearly £4000.
Of course being responsible with lending isn't a bad thing, even if to a customer it is annoying.
It proves that Next use a Feed from the Credit reference agency and that helps them in their own credit making decisions.
Very and Littlewoods also increased credit limits when our new account was open and run well for six months, so I would hesitate that the Shop Direct group also receive a monthly feed
It could be that all Catalogue companies do, so it's always worth keeping up with credit repayments elsewhere and limiting how many times you apply for credit.
Do this and keep up your repayments will stand you in good stead to getting a credit limit increase.
Spread the Cost on Buy Now Pay Later
Some Catalogues offer you the option to BUY NOW, PAY LATER. (For Example, Buy Now, Pay 12 months later.
These deals can be a huge help to you now, but do consider making repayments each month or as often as you can to reduce the debt as quickly as you can.
These sorts of offers are a great way to pay no interest and no repayments on items you want and need.
However, if you fail to pay the full balance before the end of the buy now pay later period you will find interest is added to your debt and this will seriously increase the debt you owe.
These deals offer a great opportunity to you if you can clear the balance before the Buy Now Pay Later date, if not, consider carefully the impact of the interest and payments coming up.
How will I be notified if I am being offered a Credit limit increase?
These days most Catalogue companies will run their account online or by using the Catalogue companies mobile phone APP.
Often, Credit Limit increases are announced on your Monthly Statement. This will be followed by an email and even a text message to inform you that your credit limit has been or is about to be increased.
Usually the new Credit Limit will be applied to your account right away and can be used instantly, in other cases you may be asked to accept the new credit limit
If you still receive your Catalogue statements through the post you will likely receive notification on that statement that your Credit limit has been increased
How Often will I get a Credit Limit increase on my Catalogue?
All Catalogue companies are different and will review credit limits at their own rate.
The JD Williams group often offer a low initial Credit Limit and we will wait to see how you manage your account for a couple of months before they consider a credit limit increase.
Some JD Williams customers may run an account very well for 12 months and still not be offered a credit limit increase.
We found Look Again, Freemans and Curvissa one of the fastest Catalogue companies to offer us credit limit increases.
Once a Catalogue company gets to know you better, they will often start to increase the Credit Limit.
Next on the other hand can increase, reduce or suspend credit limits pretty much monthly.
Once a catalogue company is confident you will make your repayments on time they will often increase Credit Limits by a few hundred pounds at a time, (again that applies if you are managing other financial agreements well).
Freemans Credit Limit
Freemans Catalogue reviewed our Catalogues credit limit after six months, and after this period, we received several credit limit increases every few months.
Littlewoods and Very Catalogue credit limits
Littlewoods and Very both increased our Catalogues credit limit after 8 months, these increases were pretty big too, nearly doubling our Credit limits.
Next Credit Limits
Next review credit limits often, this means one month your Catalogue credit limit could be a few hundred and the next month a few thousand and the next it could be back to a few hundred. Our Credit limit with next started at £250
After a few months it was suspended altogether and they told us it was because of information they received from a Credit Reference agency. Then our Credit limit was reduced to £100 as the restriction was removed. Three months on we received notice that our Credit Limit was going to to be increased to £3750.
So it looks as if Next will review your Credit limit every month, by taking out more credit elsewhere or making applications for credit you could find your Next Credit limit being reduced or suspended.
However, if you appear stable and are making repayments on time and not taking on too much credit elsewhere, Next are likely to be confident you can afford your repayments and are likely to offer bigger credit limits.
The Best way to Get a Catalogue Credit Limit Increase
Remember Catalogue credit limits can be increased after just a few months of opening an account. But only spend what you know you can afford. Just because you have a large Catalogue credit limit, this doesn't mean you need to spend it.