business & finance
from a private party and working out to become middlemen in the transac- How Much Credit Do We
credit terms with that seller. Many pri- tions. I believe most consumers are Need ?
vate sellers are reluctant or unable to less apt to stiff a local merchant than Aside from the deceptive practices
carry financing, but if you ask around they are some cold-hearted bank. The of the banks, and the lack of oversight
enough, you may find somebody who customer appreciates the customer by our regulatory agencies, part of the
will. service extended by the merchant and current financial problem has been an
this can lead to more repeat business, over-reliance on credit by businesses
Other Purchases which is where the real profit lies. and consumers alike. The bottom line
When I was growing up in the fifties is credit costs money. If we can find
we didn’t have credit cards. It was not Layaways ways to make purchases without cred-
unusual for a mom and pop business to Some businesses have started to it, the purchase costs less. If we can
carry their own credit. Doctors also return to the old practice of accepting run our businesses without relying on
frequently carried their own credit. layaway purchases. In this type of credit to make expenses, we see more
Most well-run businesses in those days arrangement a consumer makes a pur- profit. By relying a lot less on credit
included an allowance in their opera- chase and the store keeps the item he and by cutting out the banking middle-
tional budget to allow for bad debts, purchased in storage until it has been men, we all gain. Granted, you can’t
and this percentage was usually some- paid for. The customer makes period- always do this, but the more we can get
where between 2 and 5 percent. ic payments until he has paid off the by without the banks, the better off we
Today they pay that fee to credit card purchase and then takes delivery on will all be. HNM
companies or banks, and still have to what he bought. If any interest is
eat the losses if a debtor doesn’t pay. charged, it goes into the pockets of the
Source:
articlesbase.com
What’s to stop some of today’s busi- merchant, not to some bank. In some
Ron Coleman has been a freelance cartoonist and
nesses from continuing that old prac- cases there is no interest charged, just a
writer for over 40 years. His work has appeared in
tice? In most cases they will make restocking fee if the customer cancels
hundreds of magazines, newspapers, books and on the
internet. Samples of his work can be seen at his web-
more profit than if they allow the banks the purchase. site:
http://www.colemantoons.com
52 Celebrating over 15 Years of Embracing Diversity WWW.HNMAGAZINE.COM
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