Household HSBC Watch

NEW YORK - With retail sales proving more sluggish than expected — and concerns that home heating bills will crimp sales even further — many retailers are finding the need to be more creative this winter.

Household International, known nationwide for high interest rates and predatory lending and now owned by HSBC, can help out merchants (sic) but may hit customers hard.

One approach that’s proving popular are offers of zero percent financing for 12 or 24 months when shoppers buy big-ticket items like plasma televisions and washing machines. Even though such deals can lead to write offs — the customers drawn to them often have less discretionary income and are more likely to default — retailers like Sears and Circuit City feel they can live with the delinquencies, because they’re not as margin-killing as having to mark down merchandise by 50 percent .

In an effort to turn no-interest financing into a proit making deal for all, finance companies that back merchant credit cards turn to shady billing, no statements, and ‘late’ payments to extract a high fee from consumers. Did you mail your payment early only to find out it was applied much later? Didn’t get a statement? Discovered the company does not apply payments from noon Friday until 10 AM on Monday even though they receive mail seven days a week? Welcome to the new world of predatory lending, an area that HSBC knows a lot about. Watch that Best Buy or CompUSA purchase carefully or ‘no interest’ may turn to ‘high interest’ quickly.