Quote:
Originally posted by limited
quick question-
in an earlier reply you said that credit given by a retail store is considered "bad" credit, because its a higher risk. could you go into a little more detail about that? Why isn't money lent by Visa the same as lent by Macy's or Filenes?
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I don't believe it is considered the same because generally Department store credit cards have the ability to use less strict guidelines. (AKA they can approve more people for their cards)
I would imagine that it would have something to do with the "loss" if someone didn't repay them. A store buys their wares at a much discounted price, and if someone who had bought, say, $1000 worth of clothes defaulted, they probably would only be out $200. However, Visa is losing cash. If someone who owed them $1000 defaulted, the would be out the entire amount.
Hope this answers your question! If not, just post again