Bi-Lo's Grocery Credit Card Stirs Concern

When is a payday loan not a payday loan? Well, South Carolina?s chain of Bi-Lo grovery stores is hoping that it?s when a payday loan is disguised as helpful store credit.

Armed with a BonusPay card (a program run not by Bi-Lo, but by Purpose Solutions and the First Bank of Delaware), cash-strapped users can buy to their hearts? content ? with a limit of up to $200. Users are then charged between $3 and $5 each time they use the card at checkout, and a monthly fee of $4.99. The balance and fees are deducted from the users? checking accounts. There?s no credit check. No proof of income. You just need a checking account and a shopping list to get started.

Proponents of the BonusPay system, like Avery Price, store manager for the Bi-Lo on Cherry Road in Rock Hill, SC, argue that, “Paying a fee like this is a whole lot cheaper than bouncing a check,” said. He told the Charlotte Observer that the grocery store giant plans to introduce the program to N.C. stores in a few weeks.

Critics, however, don?t share Price?s enthusiasm. They claim that the program is too much like a payday loan, and would target poorer shoppers who already have a difficult time making ends meet. Payday loans are severely curtailed in North Carolina, which capped interest rates on short-term loans.

And what about Price?s claim that BonusPay is ?a whole lot cheaper than bouncing a check?? If shoppers don?t have enough money in their checking accounts to pay the BonusPay balance, they are assessed a bounced check fee.