Many would have you believe that Americans should not be in debt.

Well, with consumer debt totaling $3.778 trillion in the 3rd quarter of 2018, it looks like a lot of people didn’t get the memo!

Debt, including revolving lines of credit and installment or personal loans, is not inherently bad. In fact, it’s been referred to as the grease that makes the economy work. How you incur and manage debt will determine whether it is good or bad for you personally. But make no mistake, American’s are addicted to monthly payment plans.

More and more businesses are pricing their products and/or services as a subscription. Those devices we have clutched in our hands all time are typically paid for with 24 easy payments and then we upgrade them for the newer version. Why pay a lump sum up front when you can pay over time and get a new one once paid off? Another example of how consumers avoid having to plunk down a large wad of cash is a vehicle lease. Just easy monthly payments that fit in to your budget and you have yourself a shiny new ride!

Lenders that offer personal loans and revolving lines of credit can enable any business to offer a pay-over-time program. By doing so, these businesses are actually pulling in a sale today that, without financing, might be made months or years down the road. And, more than likely, that sale will end up with another business.

What stimulates sales is the ability for businesses to offer its product/service as a monthly fee, not a large sale price. It’s a share of wallet approach. A consumer has a finite amount of money deposited in to their bank account each month. Which businesses those dollars are allocated to has a lot to do with whether a business offers a monthly payment program that fits that consumer’s budget.

Pay-over-time consumer finance programs help “grease the skids” of the U.S. economy and stimulate sales for many businesses. Businesses that don’t have a way to allow consumers to get the product or service today stand to lose the sale to the business down the road that does.

Go ahead, grease those skids!

~ David Weyher