Charge Cards Continued

Points to note Shop cards limit you to particular stores - that's fine if you usually shop there anyway but you could be missing out on better bargains elsewhere.

Verdict Convenient - the shop will make the arrangements, but can be expensive (particularly shop cards) so check that you can't borrow more cheaply elsewhere.

WARNING If you fall behind with the payments for something which you've bought on hire purchase, the supplier can, in certain circumstances, take back the goods. But, if you've paid at least one-third of the total amount payable, the supplier would need a court order before they could do this. If you've paid less than a third, the supplier must send you a formal default notice. This gives you at least seven days within which to bring the payments up to date, in which case, you keep the goods and the hire purchase agreement continues as originally intended.

TIP - If you can't keep up the payments under a hire purchase deal, you can end the agreement. This means that you return the goods to the supplier, and you have no further payments to make. But the money you've paid so far is deemed to have paid for the hire of the goods over the period you had them, so you get nothing back - not a good deal.

You must have paid at least half of the amount payable before you can end the deal. If you haven't paid that much, the supplier is legally entitled to demand the balance to take your payments up to the half-way mark. Check the terms for ending a hire purchase deal before you commit yourself to it notice will normally be required, and you may not be able to end the agreement before it's run for 18 months.

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Charge Cards And Gold Cards

Where from? Specialist card companies such as American Express, Diners Club, banks.

How they work There's no spending limit and you can use the card to pay for goods and services for any amounts. But you must pay off the whole bill each month. There's an annual fee of anything from £40 to £60, and there may be an initial joining fee. Gold cards are 'up-market' charge cards available to people who can show they have high earnings. Points to note Charge cards aren't strictly classed as credit cards because you have to pay off your bill each month. But cardholders may have access... see: Charge Cards And Gold Cards

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