Consumer Credit Growth Driving Higher Holiday Spending

Furniture World News Desk on 12/14/2014

With U.S. consumer spending slowly, but steadily, recovering from the depths of the recent recession, Versatile Credit says that retailers may have reason for optimism this holiday season and into the new year.

Still, for many high-ticket retailers, such as furniture, flooring, mattress, jewelry, automotive and electronics stores, readily available credit continues to be a key to driving sales. And total consumer credit is growing at a healthy rate. According to the Federal Reserve Bank of Philadelphia, during the second quarter of 2014 consumer credit grew by more than 8 percent, one third higher than during the full pre-recession year of 2007.

A challenge for retailers is linking customers with the best available lenders. "The turnkey solution from Versatile Credit ," says Rob Meyer, executive vice president, product and marketing, for Versatile Credit, "helps directly connect credit-seeking consumers to more than 20 potential lenders. So far in 2014, Versatile’s in-store system has helped generate over $1.5 billion in approved credit for its retail customers." That number has Meyer optimistic that 2014 holiday spending will surpass that of last year.

“The numbers we’ve seen throughout the year would indicate we will top the $158 million in approved credit our Versatile Credit solution generated during 2013’s extended holiday season,” he said.

Versatile’s self-service credit ecosystem, used in thousands of North American retail locations, provides consumers with a private, secure and quick credit application process. If the retailer’s primary lender denies credit, the application is automatically sent to secondary lenders – reducing credit denials by up to 40 percent. Credit decisions are generally received in seconds.

Retailers using the Versatile Credit solution typically see a 20 percent increase in credit applications. With more credit in consumer hands transaction size increases by 15 percent or more.

During the year, Versatile added a number of leading credit and rent-to-own providers to its roster, including PFS, Credit Source, Genesis, AcceptanceNow, Fortiva, YBUY and Crest Financial. Versatile also began offering integrated promotional campaigns through a partnership with direct mail giant Mail America.

In order to ensure the security of all transactions, Versatile Credit achieved compliance with the highly comprehensive standard for payment card security set by the global PCI Security Standards Council.

“Both consumers and retailers using our credit solution can be assured that all data is protected by the most comprehensive security standards,” Meyer said.

Earlier this year, Versatile Credit introduced a new compact countertop credit kiosk — The Hive — designed to fit in more retail outlets. Versatile also made its entire kiosk family available for one simple, all-inclusive monthly fee with no down payment or long-term contract required.

“By offering a private and secure environment to apply for consumer credit and rapid responses from leading lenders, big-ticket retailers can significantly improve their sales this holiday season and throughout 2015,” Meyer said.