Many retailers offer interest-free credit on larger purchases such as furniture or electrical goods. The finance company is usually a different company from the retailer.

Interest-free credit is a credit sale agreement which does not include any interest in the loan, so the amount you pay for the goods is the amount of the loan.

This is the cheapest form of credit you can have as long as you keep to the terms of the agreement. There are usually penalties for missed or late payments. If you do not pay in full within the time allowed, the finance company usually adds interest to the amount you owe.

If you do not pay the interest free credit in full within the time allowed, the finance company usually adds interest to the amount you owe.

If you cannot pay, the creditor will follow their collections process and may eventually issue a default notice and take court action.

If you are having problems paying your debts we can help you. You can use our online debt counselling service, CCCS Debt Remedy, which will provide you with the most appropriate solution to your debt problem. Alternatively contact our free Helpline on 0800 138 1111.

If you have to make a complaint about an interest-free credit agreement, contact the creditor themselves first.

The creditor is the company who provides the finance. This may be a different company from the shop who provided the goods.

Creditors offering this type of finance must have a consumer credit licence to trade, so if your complaint is not resolved within eight weeks, it can be referred to the Financial Ombudsman Service.