5 Things You Probably Didn’t Know About Retail Financing
So, you think you know retail financing, do ya? How familiar are you really? If you’re a decision maker when it comes to retail financing or a consumer thinking about opening a store card to finance a big-ticket item, the following is information you’ll need to make sound decisions.
- Retail Financing Comes in Many Forms
Retail financing can include store credit cards (including store cards backed by major credit card providers, such as Visa or MasterCard), personal cash loans, and financing property aka at-home layaway (cars, furniture, etc.).
If you’re a retail business considering extending your retail credit offerings, don’t attempt to add debt on your own. It’s important to work with retail financing partners such as Crest Financial to ensure you don’t lose money on accounts. These partnerships allow financing experts to determine who is a worthy candidate, and they manage billing and collecting on the accounts.
- Bad Credit and No Credit are No Problem
You don’t have to have perfect credit to receive retail financing; in fact, no credit needed and at-home layaway programs don’t even run your credit to determine approval. Using Crest Financial as an example again, financiers will look to verify your identify, as well as your ability to pay back the loan. In as little as a few hours, you could have a credit decision.
- Retail Loans are Different Than Retail Financing
“A retail loan is similar to a mortgage loan acquired to buy a real estate property,” reports Small Business Chron. It’s what’s used to secure a commercial property. It has zero to do with retail credit or financing.
- Retail Financing isn’t Limited to Stores
Retail financing encompasses a lot of different things, including overdraft protection. Most banks offer an overdraft protection plan, but you must be credit-worthy to use this service. Payday loans, which aren’t recommended due to their extremely high interest fees, are another example of retail financing. There are better and cheaper ways to receiving a cash loan than a payday loan.
- Store Cards are a Number Crasher
In a lot of ways financing is better than opening a store credit card. At-home layaway or traditional financing is almost always a better method because these methods can and will improve your credit (assuming the financier reports to the credit bureaus).
According to Investopedia, store cards are a number crasher because they offer instant credit approval. The site warns that “credit-seeking transactions have a long-term impact to your credit. Known as a hard inquiry on your credit file, experts estimate that they can impact your credit score by as much as 30 points.”
Retail financing encompasses a broad range of themes, which is why it can sometimes be confusing. If you’re a consumer, it’s important you consider whether or not your credit can withstand the transaction. If it can’t, you’ll want to consider No Credit financing/at-home layaway. This type of financing provides a good service, which allows you to get what you need without crashing your score.