Amazon’s View of the Credit Crunch

So how significant is the “credit crunch”?

You can get whiplash reading dissenting views on the subject. Consider just this post from Marginal Revolution, a response to (inter alia) this post — from the same Marginal Revolution blog.

I will leave the macro implications of the credit crisis to the economists. But if you’re looking for signs that consumers are feeling the pain of constricting credit, you might want to take a look at the e-mail below that I recently received from Amazon.com. I cannot say that I’ve read every promotional e-mail that Amazon has ever sent me, but I certainly don’t ever recall anything like this.

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The media has been full of stories about tighter consumer credit, some of them more legitimate than others. (Here’s a new one from today’s Times.)

Please feel free to share your own tales of the credit crunch.


ESC

Just last week, I used the drive-in window at the bank to make a deposit and they asked if I'd be interested in a home equity loan at 5.99%. The bank version of "would you like fries with that," I suppose. This was PNC.

Bear Stearns

Yes, the Times article mentions Target as a business tightening credit offers but Amazon offering free financing on cameras is hardly evidence that the "credit crisis" is a product of media overhype. Cameras are outdated as quickly as cell phones, laptops, and HD TVs. Not only that, a BusinessWeek article from August of 2007 stated that the Market Research firm InfoTrends forecast a 12% increase in sales growth over the next year in a "Second Wind" for cameras as consumers replace previous models. Between the cost of keeping these extra cameras on from lower consumer spending on stock as well as the drop in price that they will face over the next year if not sold, it is clear that selling them at their current price now with free financing is their best option. There is an obvious difference between furniture,electronics, being a bank offering loans, and being a retailer making the most out of their inventory. Try telling a recent grad looking for banking jobs that theres no credit crunch.

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Gene

I have to agree with 17. We are getting more credit card offers than ever. We are averaging probably a couple EVERY day. (some days none, other days 5-7!). I have to admit The WAMU offer is pretty tempting, got a couple of those...

I have yet to see any evidence of a dry up in consumer credit. I've heard a couple of "I know someone who..." couldn't get whatever, but they are 3rd hand and don't seem reliable..

Matt

Days after a pack of our Banks were (announced to be) part nationalised I had an Amazon.co.uk email informing me they'd reduced their minimum spend for free delivery from £15 to £5.

I'm guessing a lot of financial advice books retailing for >£5 will be being climbing up the best sellers list this quarter.

Joe

#6: I too have noticed a staggering decline in unsolicited credit card offers over the past 2-3 months.