AHR 2022: Understanding How Consumers Use Credit

Today, most people do not have money saved for an emergency.

Feb. 3, 2022

2 min read

Keri Kalshultz, sales manager at FTL Finance, told 2022 AHR attendees that most homeowners prefer to use some type of buy now, pay later plan for HVAC repairs and replacement.

In 1950, Diner’s Club established the first credit card that could be used in multiple establishments. Since then, Americans have had a love-hate relationship with credit. For some it’s a lifeline, for others it’s an emergency/big-ticket item use only; the remainder fall into the middle.

Today, most people do not have money saved for an emergency, noted Keri Kalshultz, sales manager at FTL Finance. She told 2022 AHR attendees Feb. 1 that people with cash-flow problems prefer to use some type of buy now, pay later (BNPL) plan.

“All demographics like this,” she said. “They’re easy to finance and usually have no or low interest.”

Personal loans are the fastest-growing debt category, she added.

When homeowners are faced with a large bill for replacing HVAC equipment, they may not have the cash to pay for it. Offering financing options may be the only way to make that sale.

Kalshultz identified six options available for BNPL:

Installment loan
Equal payments loan (set number of equal payments)
Deferred interest (no interest for a promotional period)
Same as cash (no monthly payments during loan term)
Lease program (lessor retains ownership and is responsible for maintenance)
Rent-to-own (monthly payment for a specified time period with an option to buy)

Lease programs are the newest trend, she noted, with rent-to-own making a comeback, especially among younger homeowners.

To keep the customer, contractors should have one monthly payment program and one deferred interest program in their financing arsenal.

While many contractors do offer financing options, many customers don’t know that. Kalshultz suggested having that information prominently displayed on websites, service trucks (decals or other signage), and on estimate/quote documentation.

About the Author

Kelly L. Faloon

Freelance Writer/Editor

Kelly L. Faloon is a contributing editor and writer to Contracting Business magazine, Contractor and HPAC Engineering. The former editor of Plumbing & Mechanical magazine, Faloon has more than 20 years experience in the plumbing and heating industry. She started a freelance writing and editing business in 2017, where she has a varied clientele.

Faloon spent 3 1/2 years at Supply House Times before joining the Plumbing & Mechanical staff in 2001. Previously, she spent nearly 10 years at CCH/Wolters Kluwer, a publishing firm specializing in business and tax law, where she wore many hats — proofreader, writer/editor for a daily tax publication, and Internal Revenue Code editor.

A native of Michigan’s northern Lower Peninsula, Faloon is a journalism graduate of Michigan State University. You can reach her at [email protected].