39. Which of the following statements is/are TRUE regarding \"private label\" cr
ID: 1127084 • Letter: 3
Question
39. Which of the following statements is/are TRUE regarding "private label" credit cards? CIRCLE ALL THAT APPLY (2 points) Through an arrangement with a finance company, private label credit cards can be offered to customers by retail companies that are too small to justify having an in- house credit card department or a finance subsidiary. a. credit card. The retail company must approve the customer's ability to repay any borrowing before the customer's credit limit can be established. c. enabling customers to purchase its products on credit.Explanation / Answer
Answer a:- True. As by offering Private label credit card the retails stores or wholesalers can offer extended credit periods to the customers and thus making more purchases. It is a more efficient way of purchasing and takes very few time.
Answer b:- False.The role of finance companies is to provide the collection while the billing services which includes invoicing the goods purchsed are done by the retail stores or wholesalers.
Answer c:- True. The retail cmpanies must analyse the credit worthiness of the customers who are issued a Private lbel credit card so that they may not make any default at the time of payment to the bank.
Answer d:- True. The retails company by provinding the facility of Private label credit card is providing benefits to the customer as they can now purchase more and have the option to pay later than the date of purchasing such goods. It is a very efficient method for both the retails company as it increases their rofit and the customers as it increses their purchsing power.
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