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The 'buy now, pay later' bubble is about to burst

theatlantic.com

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Re: The 'buy now, pay later' bubble is about to burst

#21

Post by paulgb »

desas wrote: post #19
yladiz wrote: post #7

Earlier quoted context omitted.

I think this is a bit too simplistic of a way to look at it. Having sone debt is not necessarily bad, even outside of enormous purchases such as a house or car. First, c'mon, people don't (directly) finance sandwiches. Have you ever seen a sandwich shop accept Klarna? If you're talking about a credit card that's something but that's not what this article is talking about, which is BNPL. Second, in general it's not as…

> First, c'mon, people don't (directly) finance sandwiches. Have you ever seen a sandwich shop accept Klarna? If you're talking about a credit card that's something but that's not what this article is talking about, which is BNPL. In the UK, Deliveroo (a food delivery company) will let you pay by Klarna for orders >= £30, including from sandwich shops. Here's the press release: https://www.klarna.com/international/pr…

The article also links to https://zip.co/us/store/uber-eats, which is similar in the US.

Re: The 'buy now, pay later' bubble is about to burst

#22

Post by Ultimatt »

desas wrote: post #19
yladiz wrote: post #7

Earlier quoted context omitted.

I think this is a bit too simplistic of a way to look at it. Having sone debt is not necessarily bad, even outside of enormous purchases such as a house or car. First, c'mon, people don't (directly) finance sandwiches. Have you ever seen a sandwich shop accept Klarna? If you're talking about a credit card that's something but that's not what this article is talking about, which is BNPL. Second, in general it's not as…

> First, c'mon, people don't (directly) finance sandwiches. Have you ever seen a sandwich shop accept Klarna? If you're talking about a credit card that's something but that's not what this article is talking about, which is BNPL. In the UK, Deliveroo (a food delivery company) will let you pay by Klarna for orders >= £30, including from sandwich shops. Here's the press release: https://www.klarna.com/international/pr…

Klarna does more than just BNPL loans though, they do normal credit too.

Re: The 'buy now, pay later' bubble is about to burst

#23

Post by andrewaylett »

Nextgrid wrote: post #6
senttoschool wrote: post #2

“We found that most of the people that use buy now, pay later either don’t have or don’t use a credit card,” Marco Di Maggio, an economist at Harvard, told me. He said that Gen Z was skeptical of credit cards, possibly because many of them had seen their parents sink into debt. This is always weird to me. It makes sense why Gen Z does this. But weird. I can get 2-4% back on all my purchases using my credit card, incl…

> I've always paid the full amount every month. Does Gen Z lack this discipline? I'm not sure it's a Gen Z thing - credit cards were always subsidised by those who "lack the discipline". If everyone paid on time all the time they wouldn't give anyone an interest-free period.

Banks primarily make money on interchange fees, rather than interest -- if everyone paid on time all the time then they'd be very happy.

Re: The 'buy now, pay later' bubble is about to burst

#24

Post by mschuster91 »

dusted wrote: post #3

I don't get it.. There's a childrens song in Denmark, it's lyrics go, roughly translated "and if you have money, then you can have, but have you none, then you may go!" (it's about buying bread at the bakery).. When I see how people spend money they don't have, I'm always wondering if their parents never sang for them when they were young, or if they are of a particular dim nature. Sure, I can see why some people wou…

> "But old cars break down and are expensive to get repaired" Yes, but you don't have money to pay someone else to repair it, old cars have cheap parts and are relatively simpler to repair, learn how to do it, you're not in a position to be fussy about what skills are beneath you if you can't pay someone else to do it, stop thinking so highly of yourself and get to it!

You're ignoring the "boots theory" [1]. A new or somewhat-recent used car is like the pair of boots of the story - the poor person that buys a trash barely roadworthy 2000$ car each year pays at least 20000$ over ten years plus whatever the extra cost of maintaining a trash car each year is, higher insurance rates, more fuel and has more trouble with unreliability and the followup costs (i.e. unplanned uber/whatever fees to get to work because the car broke down). Not to mention if they do repairs themselves, they need to have or acquire the skills and tools and have the time available for doing such repairs. Neither of this is cheap.

In contrast, the rich person who either buys a decent new/recent-used car or finances it pays roughly the same amount of money if he sells the car after these ten years, paid less for maintenance, insurance and fuel, had less issues getting to and from work and a higher quality of life.

The real problem is that a full time employed person in most Western countries can no longer afford a new Western-made car without going into serious amounts of debt. Cars have gotten too expensive and wages (especially after tax, rent and basic costs of life) have gotten too low - a complete turnaround from the Ford era whose principle it was that a worker should be able to afford the product he makes in a reasonable time!

[1] https://en.wikipedia.org/wiki/Boots_theory

Re: The 'buy now, pay later' bubble is about to burst

#25

Post by ivanche »

fleischhauf wrote: post #12
ivanche wrote: post #10

Earlier quoted context omitted.

If you can afford 12 payments with interest, you can by definition also afford to save for 12 months and then buy the camera. BNPL and credit card companies are masters of exploiting psychology and especially currently prevailing wusiness and entitlement ("But I want it now!!!1!", "I deserve to treat myself like a king").

while I agree I can also see cases where you need things not later, but now but you'll have the money later not now. e.g. moving to a remote village where you really need a car or buying that compute for data processing or rendering you need for your freelance work

Yes, "need" is different thing. OP specifically wrote "want". Of course if it's a matter of life or death I would take credit.

Re: The 'buy now, pay later' bubble is about to burst

#26

Post by kortilla »

yladiz wrote: post #11
ivanche wrote: post #10

Earlier quoted context omitted.

If you can afford 12 payments with interest, you can by definition also afford to save for 12 months and then buy the camera. BNPL and credit card companies are masters of exploiting psychology and especially currently prevailing wusiness and entitlement ("But I want it now!!!1!", "I deserve to treat myself like a king").

Okay, I repeat my question above: if you can afford to pay over 12 months (meaning, you don't go into debt to do so), what's inherently wrong with doing it instead of waiting 12 months and paying all at once, besides ideological reasons?

It’s financially reckless. What if you lose your job?

Re: The 'buy now, pay later' bubble is about to burst

#27

Post by desas »

Ultimatt wrote: post #22
desas wrote: post #19

Earlier quoted context omitted.

> First, c'mon, people don't (directly) finance sandwiches. Have you ever seen a sandwich shop accept Klarna? If you're talking about a credit card that's something but that's not what this article is talking about, which is BNPL. In the UK, Deliveroo (a food delivery company) will let you pay by Klarna for orders >= £30, including from sandwich shops. Here's the press release: https://www.klarna.com/international/pr…

Klarna does more than just BNPL loans though, they do normal credit too.

Copied and pasted directly from the link I gave:

Deliveroo customers will see Klarna as an additional payment option when they arrive at check-out, where they’ll be able to choose one of three payment options:

    Pay Now, to pay the full amount immediately;  Pay in 30, to pay the full amount within 30 days; and  Pay in 3, to pay in three equal installments, spread over 60 days.

Re: The 'buy now, pay later' bubble is about to burst

#28

Post by geraldwhen »

dbbk wrote: post #17
senttoschool wrote: post #2

“We found that most of the people that use buy now, pay later either don’t have or don’t use a credit card,” Marco Di Maggio, an economist at Harvard, told me. He said that Gen Z was skeptical of credit cards, possibly because many of them had seen their parents sink into debt. This is always weird to me. It makes sense why Gen Z does this. But weird. I can get 2-4% back on all my purchases using my credit card, incl…

I'm 30 and never had a credit card. Always felt like an extra layer of complication I don't need. I have enough money, I'd prefer to directly spend it. With a credit card there'd always be a nagging feeling some payment would be missed or something would go wrong and all of a sudden I'd be hit with interest charges.

This is wild. Have you never had a fraud charge? Reversing fraud of any size takes minutes at most with a credit card.

With a debit card you might just lose the money.

Re: The 'buy now, pay later' bubble is about to burst

#29

Post by newaccount2021 »

dusted wrote: post #3

I don't get it.. There's a childrens song in Denmark, it's lyrics go, roughly translated "and if you have money, then you can have, but have you none, then you may go!" (it's about buying bread at the bakery).. When I see how people spend money they don't have, I'm always wondering if their parents never sang for them when they were young, or if they are of a particular dim nature. Sure, I can see why some people wou…

[dead]

Re: The 'buy now, pay later' bubble is about to burst

#30

Post by strken »

senttoschool wrote: post #2

“We found that most of the people that use buy now, pay later either don’t have or don’t use a credit card,” Marco Di Maggio, an economist at Harvard, told me. He said that Gen Z was skeptical of credit cards, possibly because many of them had seen their parents sink into debt. This is always weird to me. It makes sense why Gen Z does this. But weird. I can get 2-4% back on all my purchases using my credit card, incl…

It's a hateful little piece of plastic. You carry it around in exchange for 2-4% cashback and fraud protection that should by rights apply to debit cards too, and the credit card company sits there hoping you give in to temptation and actually use the line of credit it represents, at which point they charge you usurious rates and distribute part of their loot to all the other poor schmucks they're conning.

I have one because my bank doesn't make a debit card with a spending limit over $2000, which isn't enough to cover all foreseeable emergencies. I hate it. I hate that I'm incentivised to carry it around, I hate the temptation it represents, I hate that normal debit cards don't get the "rewards" and "benefits" that function as bait on a hook.

Gen Z is an entire generation, and not one I belong to. However, I assume it's like every other generation in that it has people who are desperate, greedy, mentally incapable, or otherwise perfect victims for the bank to sink its teeth into.

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