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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

#171

Post by [deleted] »

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.

[deleted]

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

#172

Post by pandaman »

happyopossum wrote: post #107
pandaman wrote: post #68

Earlier quoted context omitted.

Your method is just as risky - say after you've just spent 5K on your camera an unavoidable bill of $4K shows up? Now you have no extra money and have to dip into Credit (potentially with high interest). Your best strategy would have been to have $5K on hand and still use financing if the terms are favorable - it keeps your funds at steady level, allows for future planning and gives you opportunities to invest or oth…

Then you sell the camera and pay off the bill. Sheesh - it's a camera, not a life support machine...

I think you might be overestimating the liquidity of the used camera market a little bit.

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

#173

Post by dbbk »

geraldwhen wrote: post #28
dbbk wrote: post #17

Earlier quoted context omitted.

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.

I'm in the UK, fraud is perfectly covered for debit cards.

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

#174

Post by dbbk »

SaintGhurka wrote: post #48
dbbk wrote: post #17

Earlier quoted context omitted.

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.

You have me curious. What payment methods do you usually use? I just envision a life without credit cards having a bit of extra friction once in a while. Do you ever run into transactions that can't be completed with alternate payment methods? For example, I used to see hotels state that they only accept credit cards (and explicitly exclude debit cards) for checking into a room.

In the UK. That doesn't exist here... nowhere would require a credit card over a debit card.

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

#175

Post by Existenceblinks »

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.

Same. But I also never had problem with payment (I cancelled[or returned] purchase less than 4 times in my life, I can only thinking 1 or 2). Almost all credit card benefits are even out the production of incentives it drives. It's hard to prove if you spend 5% more with 3% cash back or not.

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

#176

Post by dbbk »

turdprincess wrote: post #117
t0mas88 wrote: post #44

Earlier quoted context omitted.

This is a very US specific thing and even there I'm not sure it's true. In Europe credit-card usage is much lower, and card security is much higher for both types of cards. We've had chip and pin protected cards for many many years, while the US only caught on in the last few years. Is there objective data that US debit cards have more fraud impact for their users? Or is this really more a PR story from credit card c…

I’m not sure about relative fraud numbers, but the fraud refund differences are real. With a credit card they will refund you basically no matter what. With a debit card it’s much more hit or miss - I recently had 3 fraudulent transactions on my debit card for about $100 each and they refunded only one of them. That’s crazy if you think about it - you give your card around to many people and any of them can write it…

I've had my chip-and-pin debit card stolen and used many times, never once had a fraudulent transaction refused a refund. And it always is resolved in less than a day.

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

#178

Post by phphphphp »

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?

A credit card is a long term commitment that integrates into your personal finance life, it’s a big decision you make once and can benefit from the broader finance system — e.g: you can refinance, you have legal rights (jurisdiction dependent). A credit card is a tool for the buyer.

BNPL is a product that merchants pay for because it increases their conversion rate: customers who wouldn’t otherwise buy something, will buy it, by clicking a button and entering into a financial agreement at checkout.

BNPL has been around for decades, the innovation of digital BNPL is in making it so easy for someone to walk into a financial commitment. For example, BNPL is very effective for fashion e-commerce, a market where it’s normal for a customer to fill their basket with products and then whittle it down to stay within their budget at checkout: BNPL is an antidote to that, it tells the consumer, “you don’t need to stay in budget! Just pay for it in future!”.

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

#179

Post by balozi »

tarotuser wrote: post #87

What happens if you agree to a BNPL but you BNDP (buy now, dont pay): https://www.consumerfinance.gov/ask-cfpb/what-happens-if-i-c... Hidden costs of BNPLs: https://slate.com/technology/2022/11/buy-now-pay-later-hidde... "I’m sure you’ve read a ton of stories that Gen Z is using “buy now, pay later,” all the time. The most recent Consumer Financial Protection Bureau pointed out that actually the biggest age cohort fo…

On a philosophical tangent, if you BNDP (buy now, don't pay), did you actually buy it? If you did indeed buy it, who did you buy it from - the original vendor or the party you didn't pay? We may need new language for the times we are living in.

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

#180

Post by mym1990 »

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…

Not only does Gen Z lack this discipline, most people with credit cards lack this discipline.
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