Buying Higher Debt With Milk, Eggs
When it comes to grocery purchases, at least, debt is apparently back in fashion.
Consumers ran up a credit card tab of more than $3 billion in supermarkets last year, twice the amount charged in 1991. Analysts expect the growth to continue as more and more grocery chains begin accepting plastic.
“They’ve really only begun to scratch the surface,” said Joel Friedman, a partner with Andersen Consulting in San Francisco.
Ralphs Grocery Co. said that between 15% and 20% of sales are with credit cards, up from nothing a year ago. Ralphs Marketing Vice President Al Marasca said shoppers find credit cards convenient, especially for large purchases.
Consumer Action, a San Francisco-based consumer group, contends that the trend means that many shoppers will pay more for groceries, once interest costs are rolled in. About 60% of all credit card users revolve their payments.
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Auto appreciation: What’s an 11-year-old car worth? More than you think, if a government program aimed at reducing air pollution gets off the ground.
The South Coast Air Quality Management District announced two weeks ago that it will grant “pollution credits” to corporations that buy pre-1982 cars and scrap them. The AQMD estimates that Los Angeles-area companies will pay $700 each for an estimated 30,000 cars a year.
If that estimate holds up, owners of old cars could benefit. According to Charles Vogelheim, editor of Irvine-based Kelley Blue Book, dealerships generally pay $700 or less for pre-1982, medium-size cars in good condition.
People looking for cheap cars would lose. As old cars are taken off the road and scrapped, the AQMD said, a shortage of inexpensive used cars will force more lower-income people to use public transportation.
What actually happens depends on whether corporations get involved in the program--a big question mark. AQMD spokeswoman Lisha Smith said that no corporations have signed on as yet.
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It’s what they don’t say: “Home Loans! Purchase or Refinance!” shouts Oakmont Mortgage of Woodland Hills in a recent advertisement.
What Oakmont fails to mention is whether it is licensed to make loans, as a year-old state law requires. Judging from advertisements appearing in this newspaper and others, many other mortgage lenders are failing to make proper disclosures.
Tom McCrady, an official with the state Department of Real Estate in Santa Ana, said the law was adopted to help consumers distinguish between licensed and unlicensed mortgage lenders. With the exception of banks and savings and loans, any firm making mortgage loans in California is required to have a state license.
A check revealed Oakmont is licensed by the Department of Real Estate and is in good standing. When contacted, Jack Wise, president of Oakmont Mortgage, said the company recently learned of the law and planned to change the ad to comply.
McCrady said the department is too understaffed to enforce the law, which also requires unlicensed lenders to disclose that fact in ads. Fat chance.
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Odds and ends: Milk Producers Council, an Ontario association of dairy farmers, has awarded Los Angeles-area supermarket chains its “Milk It for All It’s Worth Award.” A council spokesman noted that retail milk prices in Los Angeles are 20% higher than in San Francisco, though processing costs are the same. . . . An ad for Metro Nissan, a Montclair dealership, whispers in mouseprint: “Intelligent people live for today, remember yesterday, plan for tomorrow and read small print.” General manager Dave Marvin said a larger warning would crowd out “the exciting things we’re trying to say.”
