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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

#151

Post by [deleted] »

mywittyname wrote: post #102
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…

I'll be honest with you, it sounds like you've lead a pretty sheltered life. Living in poverty is fucking hard. All around you are parasites looking to take what little you have and kick you back to the floor. Yeah, of course parents tell their kids to do better in life. But it feels like the world is conspiring against you at every step of the way. The only time anything good happens, it's due to the kindness of som…

[deleted]

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

#152

Post by beisner »

KineticLensman wrote: post #145
phphphphp wrote: post #140

Earlier quoted context omitted.

Functionally it is substantially different to a credit card. The value of BNPL to businesses is the way that it changes the basis for a customer’s purchase decision, a credit card does not have that same dynamic. The underlying credit mechanism might be a lot like a credit card but the way borrowers interact with it, which is what matters, is very different. The mechanics of a mortgage and a car loan are very similar…

> the way borrowers interact with it, which is what matters, is very different And the differences are?

BNPL usually breaks purchases up into discrete monthly payments up-front at checkout. Whereas your credit card lumps it together into one balance, which you can pay over time.

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

#153

Post by nradov »

alexjplant wrote: post #103
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…

I always see articles like this and wonder what the big deal is... I frequently use PayPal Credit, store credit cards, and Affirm on larger purchases because I like being that much more liquid. Then I realize that I always use the 0% APR option and that I've paid exactly $0 of interest to all of these services. I couldn't imagine paying 12% APR for the privilege of owning a $1400 synthesizer much less for a delivery…

These services are able to offer lower APRs than credit cards by charging higher fees to retailers.

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

#154

Post by e63f67dd-065b »

rcxdude wrote: post #115
andrewaylett wrote: post #23

Earlier quoted context omitted.

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

Is this true? This article suggests the opposite, banks lose money overall on everything credit-card that isn't interest payments, which make up the vast majority of their income. https://www.valuepenguin.com/how-do-credit-card-companies-ma...

It really depends on the card issuer, as different card issuers have different credit profiles. American express, for example, infamously have charge cards that you must pay in full every month, and generally have a prime to super-prime profile, so they make much more money in interchange than in interest. Other banks with more sub-prime profiles (Capital One, BoA?, etc) make much more in interest than interchange.

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

#155

Post by up2isomorphism »

mywittyname wrote: post #102
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…

I'll be honest with you, it sounds like you've lead a pretty sheltered life. Living in poverty is fucking hard. All around you are parasites looking to take what little you have and kick you back to the floor. Yeah, of course parents tell their kids to do better in life. But it feels like the world is conspiring against you at every step of the way. The only time anything good happens, it's due to the kindness of som…

How is “buy what you can pay “ mentality a result of a “sheltered life”？ It is probably the opposite. Although I would add BNPL is largely embedded in US culture and education. Geez, we even apply that to our education..

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

#156

Post by paxys »

up2isomorphism wrote: post #150
sbuccini wrote: post #71

I posted this before, will post again: This article is so weak. It doesn't provide any actual reasons for why BNPL is a bubble nor why such a supposed bubble is about to burst. Seriously quotes TikTokers who are probably just paid shills for the company. There are real issues with BNPL, mostly extremely loose underwriting in the pursuit of growth, but realistically it's functionally no different than a credit card. P…

Weak or not this article does present a simple and valid fact, BNPL is abused in US, just like subprime mortgages. BTW,the same question can also be asked that you seems to be quite mad about many people seeing this article.

Credit cards are abused in the US as well, yet it is a solid industry worth hundreds of billions.

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

#157

Post by Olphs »

samjmck wrote: post #147
mywittyname wrote: post #102

Earlier quoted context omitted.

I'll be honest with you, it sounds like you've lead a pretty sheltered life. Living in poverty is fucking hard. All around you are parasites looking to take what little you have and kick you back to the floor. Yeah, of course parents tell their kids to do better in life. But it feels like the world is conspiring against you at every step of the way. The only time anything good happens, it's due to the kindness of som…

To me, it sounds more like they have lived a European life, not a sheltered life. Outside of the UK, there aren’t any European countries I know of that use e.g. credit cards on a daily basis. We are taught to avoid taking on debt and are financially risk-averse.

Credit cards are used in Europe too, but the credit part not so much, most people pay it in full end of month (or whenever their next bill comes)

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

#158

Post by Existenceblinks »

nindalf wrote: post #57

This entire thread is focussed not on BNPL, but whether the entire concept of consumer debt makes sense. Some folks say consumers should never take on debt for purchases, when they can save up instead. Others point out that it’s unavoidable in some cases. You may need a car to get to your job, meaning the asset you purchased creates value that helps you pay for it. And yet others point out that you shouldn’t be finan…

I see a lot of non-americans comments got down voted very much just because they say they won't take debt. Why is it so offensive?

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

#159

Post by UncleMeat »

_huayra_ wrote: post #126
_fat_santa wrote: post #93

Earlier quoted context omitted.

I see BNPL companies as having two types of customers: those that can't afford the full price and want to pay over time, those that read the terms closely and realized the deal is too good not to take. I took out a number of BNPL loans last year and it was never because I couldn't pay the full price but rather if I was getting the money at 0%, "free money". But I was never the target customer of these places, I was j…

Maybe I just haven't had the opportunity to buy any big ticket items with BNPL, but the few times I tried it (trying to do the "free money" thing, getting a bit more interest in my HYSA by amortizing the total payment out over time), it just created kind of a financial tracking nightmare. I'd get flurries of emails about how my "pay in 4" payment was about to process....for $13. Trying to keep track of all that for a…

This is my take too. A $10,000 purchase on 0% interest for a year earns you ~$400 in interesting from a money market fund or whatever. I'm in a high tax bracket so $160 of that goes to the government. So even for a large purchase I net $240 in a year. Hooray.

Decrease the total cost of things purchased in this manner or increase the number of different things to track (or both) and suddenly I'm paying quite a bit more in additional mental energy than I benefit in cash.

The only place where this makes sense (IMO) is when you buy a new car and can get 0% and no payments for more than a year

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

#160

Post by Olphs »

dylan604 wrote: post #120
__alexs wrote: post #69

Earlier quoted context omitted.

> First, c'mon, people don't (directly) finance sandwiches. Have you ever seen a sandwich shop accept Klarna? I put a (vegan) sausage roll from Gregg's on Monzo Flex the other day...

And when you miss a payment, what do they repo?

They repo your ass, and everything you own
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