If consumer comments can be believed, the Yamaha card is definitely not one of the most popular credit offers in the market today.
HSBC is a huge bank doing business in Europe, Asia and North America. HSBC offers commercial and global banking, private banking with trust and fiduciary services, mortgage lending, taxpayer services, insurance and credit cards.
The HSBC Finance Corporation is one of the HSBC lines of business. This sector provides private label credit cards and other services.
The Yamaha card is somewhat a hybrid credit account. It creates an open line of purchase yet a Yamaha bike bought with the HSB Yamaha credit card is considered security for the debt.
Most economists describe credit cards as unsecured debt unlike auto loans and mortgages. The private label credit cards are designed to encourage purchases of the product of a specific brand name and facilities that purchase by providing financing.
Just a few years ago, you could pursue financing of a Yamaha motorcycle when you bought a bike from a dealer’s showroom. The dealer would provide an application for you to fill out and it would be submitted to a partner bank that provided financing for the brand or for that particular dealer’s showroom.
If the loan was approved, it was similar to an auto loan. It was a loan for a specific purchase and was secured by collateral which was the motorbike.
Access to a global marketplace and online purchases perhaps led to the current practice of creating a credit card account to make a large purchase.
You apply for financing to purchase a Yamaha bike and what you receive is a credit card account. This may be for the amount of purchase but will often be a few hundred dollars higher.
Although the Yamaha credit card is issued in order to provide financing for your new motorcycle, you would be better off with a bank loan for the purchase.
If you obtain a loan to buy a specific motorcycle or car, the loan terms are clearly spelled out before you sign. The interest rate is given and is good for the life of the loan. Any fees are incurred when the loan is obtained and only late fees might add to that total should you not make payments in a timely way.
When your application for an Yamaha card is approved, the interest rate is in effect today but could be changed next month or next year. The limits on the account create more spending power for the borrower as the balance is paid down each month.
What a great way to provide money for the consumer to use for bike accessories. By the time the Yamaha is paid in full, the consumer is looking at the open spending limit and making plans to buy a new model. If he’s paid on time since getting his Yamaha card, no need to apply for financing again.
The problem with using the Yamaha card is in the terms. Consumers complain the acceptable interest rate issues for the new credit card account when they purchased their Yamaha product began to increase a few months later.
This should no longer be a problem as the new credit card laws do not allow lenders to increase the interest rate on previous purchases when the rate on an account is changed.
What has not yet been tested is whether the federal restrictions will apply for a private label account opened to provide financing for a one time or infrequent purchase.
In your excitement to buy a new motorbike, don’t take the application for financing at face value. Remember, applying for a credit card is not the same as applying for a loan to finance your new bike.
A credit card may make sense if you plan to add accessories at a later date but can cause problems if the terms of the card change. The HSBC Yamaha card is designed to sell Yamaha products.
Although it is a credit card with a spending limit attached it is also a credit account that is secured by the product you purchased.