"Brave" New World of Consumer Spending?/Borrowing?

The Atlanta Braves recently became the first sports franchise to offer a finance plan for their tickets. Articles here and here give some details. Essentially,if you are spending $200 or more, GE Money will offer so-called "90 days same-as-cash" financing. If you don't pay before 90 days, then the APR is between 20 and 25 percent. The Braves management says that they have lots of fans who "want the ticket package" but "don't have that amount of cash on hand." Is this what we mean when we say that the democratization of credit improves consumers' quality of life? Maybe the answer depends on whether you are a Braves fan, or even a baseball fan?

GE Finance announced that it anticipates that "a very high percentage of customers will pay these [loans] off" before paying interest. If that is correct, then some small fraction of people must incur substantial interest or the finance option comes with an up-front convenience charge. I assume that GE Finance is not "brave" enough (sorry!) to be losing money on this deal. As a side note, I wonder why consumers would choose this option when credit cards are available. Perhaps they need a 90-day float rather than a 30-45 day float and zero percent introductory rates are scarce these days. Or perhaps consumers believe that dealing with GE Finance is likely to be a more pleasant experience that working with a credit card company? My co-blogger Angie Littwin may have a few thoughts about this latter idea based on her research about credit preferences and substitution.

Comments

[arbogast]

Gives a new meaning to "Take me out to the ball game."

No wonder Chuck Prince is so down on GE. He's jealous he didn't think this stuff up.