Home Depot Expands Credit Program

Home Depot has announced a major expansion in its credit program. Until recently, the company had not pushed its credit card as strongly as some other retailers. Its cards were used on $6.5 billion of sales in the fiscal year ending January 31, 2000—about 17 percent of the firm's total sales. The company expects to expand its home improvement program now being tested in 65 stores to all 918 of its "big box" Home Depot stores. Under the plan, consumers shopping for home improvement products would be offered an application form. The clerk would telephone in the key details to GE Capital Financial Inc., which would use a credit-scoring program to approve or deny the application. Eventually the applications will probably be made available on a web site.

GE will approve or deny the applications for a line of credit up to $30,000, which could be used for up to six months. In addition, it will manage the portfolio and absorb bad debt losses. For its part, Home Depot will collect "a modest fee" on each home improvement loan it makes.