Credit sale

This advice applies to Scotland. See advice for See advice for England, See advice for Northern Ireland, See advice for Wales

Under a credit sale agreement you buy the goods at the cash price. You usually have to pay interest but some suppliers offer interest-free credit. Repayment is made by instalments until you have paid the whole amount.

You’re the legal owner of the goods as soon as the contract is made and the goods can’t be returned if you change your mind. The supplier can’t repossess the goods if you fall behind with repayments but they can take court action to recover the money owed if you’re in arrears.

Interest-free deals

Interest-free offers can be tempting and can be a good deal. As long as you keep to the payments you won’t be charged interest.

Goods might not be cheaper this way. The overall price of the item might be higher to make up for the interest-free element.

If you fall behind, the lender may start charging interest and this can be at a higher rate than usual. Check your credit agreement to see what the deal is. The credit agreement is the legal document you signed when you took out the credit.

Further information

The Money Advice Service website has lots of useful information about borrowing and managing your money.

Page last reviewed on 18 December 2020