Credit programs ring bells for stores and banks

Purchases made by credit card installments reached 11 percent of the total transactions last year at Suning Appliance Co stores in Beijing, about 4 percentage points higher than that of 2008.

The company began providing credit card installment loans in 2006. To counteract the gloomy economic environment last year, Suning launched a campaign in January 2009 to boost consumption. It worked with eight major commercial banks in China to make it happen.

"For a consumer with a China Merchants Bank credit card, we usually charge a 4.5 percent commission fee if he pays within 12 months," said Sun Chengzhi, general deputy manager of Suning's Beijing branch. "That would amount to 450 yuan ($66) if the product were worth 10,000 yuan. It is a considerably large sum for a consumer with a mid-level income. With the campaign just launched, all the commission will be paid by our company and the commercial banks. And that works out very well."