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Bad Debits Vs. Bad Credits

Everyone knows what a bad credit is, right? Someone who orders a lot from you, and appears to be a good customer, except for the fact that (s)he doesn't pay. Then you are out the value for the goods or services provided to this person, especially if they might have been provided to someone else.

There is also the kind of customer that might be known as a bad debit; someone who doesn't run up enough of a bill to make it worthwhile to serve him or her. For instance, a credit card user who pays in full every month, gets several days of "free float," and never generates any interest income, might be a bad debit.The solution here is to charge a fee for use of the credit card that will cover these costs.

There can be bad debits outside of the financial services industry. For instance, there is the restaurant whose food is barely priced above cost, and who makes its money on drinks. If there is a customer that habitually orders "only water" to drink, that might be a bad debit for the restaurant. Or it could be the customer of any establishment who is so demanding that your people run around in circles trying to serve him or her, thereby costing more than the business is worth.

Bad credits and bad debits. These are people at the extremes of the purchasing spectrum. The most desirable customers are usually in the middle.