Credit, where credit is due?
A new innovative mall-wide zero-interest credit scheme from Lamcy Plaza and Emriates NBD has Kipp concerned...
April 10, 2012 4:03
by Eva Fernandes
A year or two back, Kipp watched a ridiculously funny video entitled “10 reasons we are in a financial crisis.” The video featured 10 ads for home loans and credit cards. Of course, being satirical, the ads were terribly farcical. Our favorite included a giant teddy bear swimming on a carpet searching for land…erm, you probably had to watch it to appreciate it. But the point was made very well indeed: the financial mess we are in has a lot to do with the irresponsible, almost reckless promises financial institutions offered credit-crazy clients.
But that was pre-crisis. Now we are neck deep in it, studies have shown a greater resistance from consumers to buy on credit and, consequently, greater restrictions facing financial institutions wanting to offer ‘too-good-to-be-true’ credit schemes. So much so that, as we reported earlier this year, some local banks now require proof of a salary ofDh10,000-plus before issuing a credit card. This limit may seem reasonable, but Kipp remembers all too well those days when credit card sales men would literally go from door to door handing out those dangerous pieces of plastic, as if they were mere business cards.
It is these all-too-clear memories that sees us just a little alarmed by the new link-up between Lamcy Plaza and Emirates NBD. According to a recent report in Gulf News, the new ‘buy now, pay later’ scheme allows customers to buy on credit at zero per cent interest. The scheme, which has to involve a minimum transaction of Dh300, is applicable to a variety of stores in the mall, including the hypermarket, food court and the play area –marking the first mall-wide tie up for Emirates NBD.
Tim Jones, CEO of Lamcy Plaza, said: “Customers don’t have to wait long for a purchase, plus it facilitates spend across large denomination items, such as electronics, gold and jewellery, watches, perfumes, etc. Shoppers at the hypermarket don’t have to wait for their month-end salary. And equal installments [paid over a certain period of time] will be easier on the purse. An expensive suit, a leather jacket or even a perfume could be purchased with this facility.”
Ahem. Well, so much for living within one’s means, thinks Kipp. We thought the days of ‘innovative’ credit schemes were behind us. Guess we were wrong.
Word of caution dear Kippers, if it seems too good to be true, it probably is.