Some retailers are now selling everything from milk to mortgages
Melissa McCrady, Stephanie Graham
Photo: Video by tmj4.com
MILWAUKEE - With today's consumer feeling more comfortable shopping for financial products outside of a traditional bank, a growing number of retailers are stepping up their game. First time homeowner Lilly Neubauer is always looking for ways to save dough.
"At the beginning of this year we were seeing historically low interest rates, and we had heard that refinance was a great option," Lilly says.
So she headed to Costco, where she picked up groceries, home insurance, and a mortgage. Think of it as the next generation of one-stop shopping. A growing number of retailers, including Costco, Walmart, Sam's Club, and Home Depot are going beyond the basic store credit card -- offering exclusive deals on a slew of financial services.
Tom Feltner is with the Consumer Federation of America. He says mortgages, home equity loans, home improvement loans, life insurance, and home and auto insurance are all available--depending on the store. With nearly 10 million U.S households without bank accounts, and credit from conventional lenders being tight... these retail services may offer a sense of comfort.
"Consumers are drawn to the simplicity of a transaction that in previous products, there was much more of a barrier to entry," Feltner explains.
At Sam's Club, the company's small business loan program is devoted to customers who do not qualify for traditional bank loans Catherine Corley says. Since 2010 she says, "We've had over 1,000 members qualify. The average loan size is around $11,000, so that's putting over $11 million into the hands of small businesses that otherwise would not have had."
Over at Home Depot, personal project loans are offered up to $40,000.
"We have a lot of people that come in and want to do kitchen remodels, need a new roof, need a new bathroom. The project loan allows them the opportunity to finance that project," Brandon Hayes with Home Depot explains.
Walmart is testing out pre-paid, Metlife insurance cards. No matter which store you choose, Feltner urges to remember, "They're targeting customers who are looking to complete transactions very quickly and at the point of sale, and I think in many ways that puts the onus on consumers to make sure that they're getting the best deal."
For Lilly, it was a numbers game. Not only is she saving 10% a year on home insurance. Lilly says, "The difference that we've seen financially in our mortgage has been about $200 a month, so that's a big difference."
Shop around, read all terms and conditions carefully, and don't forget to compare things like premiums, interest rates, closing costs, and general fees.
Feltner says it's important to realize that retailers are partnering with financial institutions and insurance brokers to offer these deals. That means when it comes to things like mortgages and home equity loans, you'll still be putting your house up as collateral.