Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

theatlantic.com

Post reply on HN
Print view View original

191–200 of 276 posts

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

#191

Post by subarctic »

Olphs wrote: post #157
samjmck wrote: post #147

Earlier quoted context omitted.

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)

Isn't that how most people use their credit cards everywhere, or at least everywhere in the developed world? I thought the 20%+ interest was just a way to take advantage of you if you mess up and rack up too big a bill, or forget to pay your bill.

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

#192

Post by nibbleshifter »

Existenceblinks wrote: post #158
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?

Makes the Americans feel bad.

I don't think Americans understand that their credit card rewards/etc simply don't exist in Europe.

There is literally no reason for me to ever use a credit card, it just costs me money.

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

#194

Post by vorpalhex »

_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…

The BNPL schemes are targeting low income customers who either can't or won't use credit cards.

The frequent little payments is a "feature". If you can't handle a $200/mo credit card bill, getting emails for $8 here or $11 there is probably easier.

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

#195

Post by nibbleshifter »

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.

Several times my debit card has been defrauded.

I just contact my bank and they refund it within a few days and issue me a new card.

No problems.

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

#196

Post by [deleted] »

phphphphp wrote: post #178
KineticLensman wrote: post #145

Earlier quoted context omitted.

> 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, wil…

[deleted]

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

#197

Post by speeder »

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…

Sometimew people really don't have a choice.

I personally hate debt and when possible I pay everything with cash up front.

My wife got pregnant, and our spending, specially on health was already sky high, so I did 5 months of overtime chasing a promised raise and possible promotion.

Then I got fired.

My last day of work was mid December. Child will be born soon. (Maybe even today, we are hoping for natural birth).

The medical crew we hired (back when I had a job and was chasing that promotion) want way more money than what I have left.

I will have to take a loan, because as far as I know I can't tell the baby to wait until I have a new job before coming out of the womb...

Need clothes, medicine, furniture, prepare the house (it is my first child, house is not kid friendly)

Also: I erased most of my savings buying a "cool" car and of course a lot of people criticized me for it.

What happened was:

1. My house is on the top of a huge hill in an rural area, only way to reach the house in practice is with a powerful car. The car I had before was barely powerful enough, if there was more people in the car it would fail to climb the hill.

2. Someone totalled the car I had, and my wife job was literally in another city, her workplace also in middle of nowhere.

3. I needed a new car urgently, options were: cheapest European or US cars were double the money I had saved. Asian cars (like Hyundai and Chinese ones) were 1.5 the money I had, but weaker that the totalled car, they certainly wouldn't climb the hill.

4. So I bought a used Mitsubishi Lancer. It is a cool flashy car? Yes it is. But it was 100% my savings (instead of 200%), powerful enough to climb the hill, and big enough to fit baby chair and all the stuff a baby needs. The corolla or the civic, used, were 200% my savings, new were 300% my savings.

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

#198

Post by thecleaner »

One of the valid reasons for using BNPL is furniture purchases - I don't want to pay 1000 bucks upfront for shit that might be broken or not delivered on time. Although that depends on sellers integrating BNPL and being fine with it. And still doesn't justify a 46B valuation.

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

#199

Post by troyvit »

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?

Another difference is that BNPL doesn't positively (or negatively) affect your credit.[1] I'm not sure how that affects any bubble though.

[1] https://www.consumerfinance.gov/ask-cfpb/will-a-buy-now-pay-...

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

#200

Post by thecleaner »

nibbleshifter wrote: post #192
Existenceblinks wrote: post #158

Earlier quoted context omitted.

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?

Makes the Americans feel bad. I don't think Americans understand that their credit card rewards/etc simply don't exist in Europe. There is literally no reason for me to ever use a credit card, it just costs me money.

From Europe. Genuinely never used anything other than the card provided by the bank. But there are some nefarious companies which require a SEPA mandate for recurring deductions and make it hard to cancel. I also have my reservations about always using a card directly linked to my bank account but so far so good.
Post reply on HN