Are You Ready For The Credit Card Squeeze?

Today the New York Times carried an article about the tightening of personal credit.

I'm talking about credit cards: how hard it will be to get one; and more importantly
for the restaurant business….how spending limits are being cut back and interest
rates are being elevated.

Even the venerable American Express was quoted as saying they too might increase
the interest rate on their card members' cards by up to 3 percent!

Now what effect do you think this might have on you and your restaurant?

I suggest you start thinking of two things:

(1) the number of folks who will no longer be able to patronize your outlet because they are either at their card limit, or they don't have much personal liquidity…..e.g. cash in their pocket; and

(2) if you have been 'factoring' your receivables or projected credit card sales in return for cash, you might want to get your next block of credit lined up today….not next week.

Things are moving fast; if you want to have some cash on hand for extra marketing, the coming holiday season; or needed repairs and such, you might want to strike a deal now with your  'factoring' supplier, before the squeeze gets even tighter.

If you're starting to see less customers using credit cards, smaller guest checks, less frequent visitations and such, now is the time to address that with some way to bring those customers back out to your outlet.

Give them a good reason to come with cash….let them know they don't have to use their card….maybe even give them a break in some way for paying with
cash (how about an extra dessert, glass of wine, or an appetizer?)

Do whatever you can to work within the confines of this national situation. You can't do anything about the credit card squeeze; but you can work around, and within it to help your customers continue to spend with you.

If they bring in new customers, reward them in some way that is meaningful to them and cost-effective for you too.

But don't think about it too long.  Now is the time to line up some credit and get yourself some 'wiggle-room' before the tap gets turned off.

What do you think?  Give me your two cents' worth in a comment, below!