Argos scraps 6-month interest-free payment option

Argos has scrapped a payment option which allowed customers to spread the cost of purchases over six months, interest-free.

Shoppers using the Argos Card will now only be able to split payments over three months or 12 months at the checkout, depending on how much they spend. 

Here, we explain what the changes mean for you and outline alternative ways you can pay for your shopping in the run up to Christmas.

Argos changes payment options 

Argos previously offered three interest-free periods at the checkout when customers used an Argos Card - three months, six months and 12 months. 

However, customers can now only spread the cost over three months if they spend more than £50, or 12 months if they spend more than £199. The threshold required to use the 12-month option was recently reduced to £199 from £299. 

Under the old six-month option, someone purchasing an item for £150 would have been able to make six monthly repayments of £25. 

However, as they would now not meet the qualifying spend to get 12 months interest-free, they’d instead have to make three repayments of £50. 

Argos currently has an additional offer where customers can split the cost of furniture purchases over £99 across 12 months.

Why has Argos scrapped this option?

A spokesperson from Argos told Which?: 'We regularly review our Argos card promotions and the credit terms that we offer to meet the needs of our customers.

'A range of options are available for our customers to choose from, including our three-month plan with a £50 threshold, our 12-month plan which is available on any product worth more than £199 and our current Buy now, pay later plan on furniture, which is available on items worth more than £99 with 12 months to pay.'

Argos also pointed out that customers choosing the 12-month interest-free plan can pay their spending off in a shorter time frame if they wish to.

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What is the Argos card?

The Argos Card is a store card, which gives customers the ability to shop at Argos, Habitat and Sainsbury's with flexible payment options. 

With the Argos Card you can choose normal credit, giving you up to 56 days to pay. A longer ‘Buy now, pay later’ option might be available, but it's not guaranteed for every purchase.

If you select one of these plans, you won’t pay any interest if you pay within the credit plan period, but if you don’t pay in full you’ll be charged interest on any remaining balances.

The interest rate charged is 34.9% APR, backdated to the date or purchase. Credit is subject to status and terms apply. 

If you apply in store you’ll undergo a credit check and will have to bring ID and a household bill to prove your address. 

If you apply online you’ll be able to complete an eligibility check first, which won’t leave a mark on your credit file.

• Find out more: how to check your credit score for free 

Should you use a store card?

Store cards are a form of regulated credit offered by high street shops and can only be used to make purchases with that particular retailer or group. 

In the last decade store cards have dwindled in popularity due to some high street retailers going bust.

Store cards require the usual credit checks and will leave an imprint on your credit file. 

The main attraction to the cards is the deals they offer, such as Buy now, pay later options, introductory offers, and member benefits. 

But the cards typically come with high interest rates which are backdated if you fail to make a payment.

Alternative ways to pay

If you're looking for an alternative way to spread the cost of a purchase over a longer period, we've rounded up these options: 

0% interest-free purchase credit card

This is a credit card that offers 0% on spending, allowing you to spread the cost over a longer period.

These cards don't charge any interest on purchases for an initial period of between three and 21 months. The longest terms are usually available to those with the best credit scores. 

To keep your interest-free offer you’ll have to continue to make the minimum repayment each month, however it’s worth paying more to make sure you clear the debt by the end of your interest-free period. 

For example, if you bought an item for £150 and had a card which offered at least six months interest free, you could clear your debt by making payments of at least £25 every month. 

The Barclaycard Platinum All Rounder Visa has been named a Which? Best Buy credit card, and offers up to 21 months interest-free, with an APR of 24.9% (variable). Credit is subject to status and terms apply. 

• Find out more: see how other deals compare in our best interest-free purchase credit cards 2023 and the best credit card deals October 2023 

Buy now, pay later

Buy now, pay later (BNPL) schemes are a form of short-term credit that has become hugely popular in recent years – especially during the cost of living crisis, as the schemes give you the option to spread the cost of items interest-free over one to three months.

Argos doesn’t give you the option to use BNPL schemes offered by big firms such as Klarna and Laybuy at its checkout. 

However, if you were to find another retailer which accepts this method of payment, you should make sure you use it responsibly and understand how to use it safely. 

This includes setting yourself a spending limit, checking the fees, putting in payment reminders and having a plan for your repayments. 

Most BNPL schemes aren’t currently regulated by the Financial Conduct Authority (FCA). This means BNPL users have fewer protections if something goes wrong, and BNPL providers don’t have to follow the same rules as other credit providers.

Which? has been calling for urgent regulation of BNPL schemes for some time. The government committed to regulating the BNPL market, but it was reported in July that plans could be shelved due to concerns some of the biggest providers could leave the UK market.

• Find out more:one in five 'buy now, pay later' shoppers using schemes for essential items 

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