CHAPTER 14 - Tougher credit rules for consumers

Article Source: http://www.contracostatimes.com/ci_10906553

Summary

Easy loans are no longer a case for many consumers. Many of the country's major credit card issuers are almost "in defense" to reduce credit limits, increase their interest rates for customers with problematic credit scores, and sending out fewer applications for new customers in response to tougher economic times and rising default rates.

Bank of America and Capital One has been posing new and stricter policies for their Visa and MasterCard holders. "In this environment, particularly now, do always make your payment on time and pay as much as you can. Don't do anything to increase your credit risk. Don't be late on your payment. Don't exceed your credit limit," as a tip provided by Bill Hardekopf, chief executive officer of http://www.lowcards.com/

As we can all see, the ripple effects are enormous. With this tightening up for credit requirements, a great deal of lives will be affected in many ways, and harsher policies are something definite that we can all be expecting for.



Connection - Bank Credit Cards

As told from the text book, Credit cards are used so much in our society that we can visualize a society without money -- a cashless society. We are so used to credit cards that many individuals and merchants would be badly affected if their use were ever discontinued. With bank credit cards, consumers can make purchases on a short-term credit at any retail outlet that accepts the bank's credit cards.
The article talks about how major chartered banks that sponsor and provide the credit card system are lowering their credit limit, and uping the interest rates for many. Also, the increasing reluctance to accept new customers since mid-2007, when the global economy encountered a disruptive turmoil and creating an uproar of confusion in prices across the country and worldwide. Since then, a "disorderly chaos" has developed in the financial states of many.


Reflection

The declining availability of the plastic money is a sign to the financial state of a country, and currently, people around the world are experiencing a declining in both of their disposable (cash) and "disposable" (plastic) money. With the increasing minimum payments and tightening terms and conditions on existing cardholders. I think that it will for sure be changing the daily living patterns of many.

Chapter 12 - Retaielrs fight Shopping blues with discounts

Aricle Source: http://www.miamiherald.com/business/story/729611.html

SUMMARY

This article talks about how retail companies are starting their Christmas sales and cash discounts early-early; mainly because of the weakened global economy, and therefore, leading to the lack of confidence among consumers.
As described by a mother from Hollywood, "The economy is so extremely out of control; even with a job it's very expensive. You have to cut back on food, clothes and everything.''
It is the lack of confidence (money-wise) among consumers that have retailers worried about the holiday season, which is certain to be one of the worst in years. The credit crisis, collapsing housing market, crashing stock market, rising unemployment and increasing food costs add up to a deadly combination.
Retailers have been trying hard to jumpstart the season by promoting early sales and deals to customers... so to help them gain back a little more confidence and start spending money again.
Wal-Mart even kicked the season into gear earlier than ever before - on Oct. 1 with 10 toys priced at $10 each, as well as other 'cheap deals'...

CHAPTER CONCEPT - CASH DISCOUNTS

So in Chapter 12, we learned that a cash discount is a reduction of the amount of a bill if payment is made on or before the discount date stated on the bill. And the purpose of a cash discount is to encourage the customer to pay promptly. In this article, businesses, in particularly the retail industry, is trying to get through the global economic slowdown by treating their consumers to early sale events and or cash discounts that will allow them to take advantage of the available discounted amount, while receiving the money on time; so it's like a win-win situation. With the economic recession period that the world is currently facing right now, It would be safe to say that it is not only the retailer industry, but many others as well, that are struggling through the hard times; yet, trying their best to think of possible ways to retain and attract customers by making them becoming more confident in their spending... regardless of all the hidden problems that may be lurking...

PERSONAL REFLECTION

After reading the article, I realized that there has really been a mood shift among consumers. There is an emerging trend towards buying what we need vs. what we want, and for most consumers, including me as well, the buzzwords this year are definitely low prices and the best value possible. No need to say more, it has some been very visible weekends that we are seeing less people going to the mall for the purpose of fun shopping; rather, just people getting their groceries and other basic needs, such as food. Another large portion of others are just there roaming around, hanging out with friends, and window shopping... Inevitably, this is going to be one of the slowest season for everyone this year.

China stops tainted sweet sales

Article & Pictures: http://news.bbc.co.uk/2/hi/asia-pacific/7637001.stm#melamine

SUMMARY
This article is basically expanding on the latest topic on another scandalous Chinese food product involving milk contaminated with an industrial chemical called Melamine. This time, the lucky "winner" is a popular sweet called the White Rabbit candy. The producing company, Guanshengyuan, has been halting all export sales of the White Rabbit candy to more than 50 countries, and consequently, its well-established name is ruined. Both Canadian and British regulators have already taken down all of the White Rabbit candy, and on top of that, all Chinese-made dairy products are also to be pulled from shelves. While in Europe, a ban has been made on all children food containing any traces of milk imported from China, and in the United States, regulators have warned consumers to avoid seven instant coffee and milk tea products that were made in China; even Mr Brown products had been recalled to be possibly contaminated with melamine. :OOO
Below is a map showing all the affected countries from China's tainted food products:





CHAPTER CONCEPT - INVENTORY

In the text book, we learn that businesses that buy goods for the purpose of selling them at a profit are dealing in merchandise, and the quantity of merchandise on hand is known as merchandise inventory or stock-in-trade. So this article that I've chosen talks about how food retailers all over the world are experiencing a food scare in their major suppliers (wholesalers) from China, and that they are forced to take down all those poisonous food products that they paid for as inventory and was expecting for a profit; but now it has became an "expense and a LOST!



PERSONAL REFLECTION
I was shocked at the news when it first came out, but at the same time, was kind of expecting this to happen one day, just because of the reputation that China have always been tagged with (fake Gucci and phony drugs). But with the food product, this has just gone a little to far. On the last news, it is said that four babies have died and more than 53,000 children have been affected from drinking contaminated powder milk in China, this is awful, and the fact that it happened in its own domestic country makes it worst! Having kidney stones and not being able to pee/poo for no reasons is absolutely terrible, especially to the youngs and prematures! I find this very unacceptable, and that the ugly truth of money > people's ethics is making me sick!

Just look at all the sweets that kids used to crave for, now they're just silent killers that ruins your life for no good reasons.