Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

When Going Gets Tough, Tough Get More Credit


eBay hooks up with GE to boost sales.


The only thing more insatiable than American consumers' desire for more credit is lenders' ability to dream up new ways to extend it.

Online auctioneer eBay (EBAY) is teaming up with GE Money (GE) to offer instant credit access to customers using its PayPal payment solution. According to Dow Jones, GE Money CEO Margaret Keane said, "eBay buyers will find deferred payments to be an extremely easy way to buy what they really want now and plan their payments in a way that best fits their budgets." Where exactly these new purchases will fit into those overstretched budgets isn't entirely clear.

In a nod to personal responsibility, eBay expects the new program will encourage buyers to bid on items they otherwise couldn't afford. The company said credit approval can happen in as little as 30 seconds and should lead to "increased sales and higher selling prices." GE will reportedly retain the risk if payments aren't made.

eBay isn't the only retail company getting in on the credit extension act. Retailers like Macy's (M), Kohls (KSS) and Gap (GPS) all offer their own credit cards to facilitate more shopping. But recently, as consumers have struggled to keep up with monthly payments, these once-profitable lending units have been jettisoned. JP Morgan (JPM) now owns Kohls' and Circuit City's (CC) card businesses. Just last week the bank made a deal to buy a piece of Target's (TGT) floundering credit division.

Although the move may boost eBay's sales, it won't help America's debt-dependent economy move toward more sustainable levels of consumption. Having tapped out home equity lines, credit cards and to some degree retirement accounts, consumers now have another way to spend money they don't have.

< Previous
  • 1
Next >
Position in TGT

The information on this website solely reflects the analysis of or opin= =3D =3D3D ion about the performance of securities and financial markets by = the wr=3D iter=3D3D s whose articles appear on the site. The views expresse= d by the wri=3D ters are=3D3D not necessarily the views of Minyanville Medi= a, Inc. or members=3D of its man=3D3D agement. Nothing contained on the web= site is intended to con=3D stitute a recom=3D3D mendation or advice address= ed to an individual investor =3D or category of inve=3D3D stors to purchase= , sell or hold any security, or to =3D take any action with re=3D3D spect t= o the prospective movement of the securit=3D ies markets or to solicit t=3D= 3D he purchase or sale of any security. Any inv=3D estment decisions must b= e made =3D3D by the reader either individually or in =3D consultation with = his or her invest=3D3D ment professional. Minyanville write=3D rs and staff= may trade or hold position=3D3D s in securities that are discuss=3D ed in = articles appearing on the website. Wr=3D3D iters of articles are requir=3D = ed to disclose whether they have a position in =3D3D any stock or fund disc= us=3D sed in an article, but are not permitted to disclos=3D3D e the size o= r direct=3D ion of the position. Nothing on this website is intende=3D3D d = to solicit bus=3D iness of any kind for a writer's business or fund. Mi= ny=3D3D anville mana=3D gement and staff as well as contributing writers wi= ll not respo=3D3D nd to em=3D ails or other communications requesting inves= tment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos