Credit Agreements

If you have taken out a cash loan or some other financial arrangement then you will probably have entered into a credit agreement.

This is an agreement that allows you to pay for something at a later date rather than now. Credit agreements are covered by a law which means that if you break the agreement you can sue or be sued.

The law is set out in the Consumer Credit Act 1974 and only covers agreements for credit up to £25,000, but not more than this.

If you have a credit card, charge card, cheque, coupon, voucher, etc., these are all types of credit agreements.

If you buy goods which you take away with you, but pay the price in instalments this will also be a form of credit agreement.

If you pay for the goods in instalments, but are not allowed to take the goods until the final payment then this is also a form of credit agreement.

Hire Purchase agreements are also credit agreements. This is where you pay by instalments to use the goods, but have an option to buy the goods if you want to after all the instalments have been paid.

If you have taken a loan from a friend or relative however, this is not a credit agreement protected under the Act.