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Whatever happened to Store credit?


Long before there were checks or debit cards, ATM cards, or even credit cards , there was something called the charge account. People would go to a store where they were known, one at which they regularly shopped, ate, or did business, and have the bill put "on the tab."

This type of credit still exists, and at times it can be both cheaper as well as more convenient than "plastic."

Everyone has to remember that not everyone offers the old-fashioned charge accounts. They have to find a small store or shop or some chain of stores.

There are number of reasons why still some businesses are running on old-fashioned cards and those are looking much more friendly than the newer facilities.

One of the advantages to the store is the fact that MasterCard and Visa charge a "processing" fee for every charge, usually a percentage of the entire bill. That percentage can range from three to seven percent. Of course, the store gets its money more quickly. However, those same Master Cards and Visas can be used at any store in town, and there is nothing stopping that person from using them elsewhere.

Having a charge account "personalizes the service that the customers get. They feel more connected to the store, and the store's staff feels more connected to them because they get to know them by dealing with them on a regular basis."

A good customer can also get a break on the interest rates as well. Some small stores and shops charge no interest at all if the account is paid promptly. He charges no interest if the bill is paid on time, standard interest if it's late, and it will actually give a discount if the account is paid early.

The person or company setting up the account can also set guidelines for its use. Certain people have "signing authority," and that authority can be limited to a dollar amount or to certain types of merchandise. Since it is all in the computer, it is easy for anyone in any of the stores to process a sale and make sure it conforms to the guidelines.

Some small "family" stores will grant "charging rights", without even bothering to run a credit check because of the familiarity.

Imagine setting up a charge account for yourself at the corner store so you could send the kids to pick up what you need for dinner, and not have to worry about their carrying cash or, even scarier, a blank check.

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