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

211–220 of 276 posts

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

#211

Post by r00fus »

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…

I mean, yeah the article should have prefaced it all with the raise in interest rates that signaled the end of QE/ZIRP aka "free money".

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

#212

Post by buescher »

mschuster91 wrote: post #190
buescher wrote: post #135

Earlier quoted context omitted.

The boots theory does not really hold for mass produced items, including boots. A usable pair of cheaply made boots costs less than resoling a good pair of boots. I propose the Buzz Bissinger boots theory: Buzz is not rich because he buys fancy boots, Buzz buys fancy boots because he inherited a lot of money. https://www.gq.com/story/buzz-bissinger-shopaholic-gucci-add... The sweet spot in TCO for cars is generally (…

> A usable pair of cheaply made boots costs less than resoling a good pair of boots. Yes, it does, but it's worse for everyone: - those who make the shoes because the conditions under which clothing in general is made are horrible (see e.g. the numerous instances of fires in Bangladeshi factories) - the environment because these cheap boots are made out of fossil resources, they have to be shipped around, and at the…

Oh ok, I was wrong. Working people should spend more of their paychecks on boots to prevent fires in Bangladeshi factories, and then it will be more comfortable walking to work because they can't afford a car. And no shopping in your utopia either.

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

#213

Post by lotsoweiners »

grishka wrote: post #204

What absolutely blew my mind about this article is how it considers being in debt a norm. An unspeakable rule of sorts to not even try to manage your finances and save up and all that. Like wtf? How the hell do you function in society if you can't afford groceries and have to buy them on credit? The even more perplexing thing, to me, is why it's so common among Americans to pay for things with credit cards when they…

I am an American in my 40s and I pay everything on my credit card. All of my reoccurring bills: childcare, mobile phone, internet, utilities, etc are on my credit as are all purchases at stores/restaurants. I pay the balance every month. I end up with several free flights or hotel stays each year by employing this strategy. Added bonus is that if there is fraud, no money has left my bank account (this happened to me in the past year).

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

#214

Post by barbazoo »

wyuenho wrote: post #210
barbazoo wrote: post #207

Earlier quoted context omitted.

> ay you bought a new £800 stand mixer on Black Friday. Splitting the costs in 3 allows you to deploy the funds elsewhere, such as investing in an index fund, buying bonds or put into a CD account or anything productive to offset some of the cost or if you are lucky, cover it. Those 0% financing offers only exist because interest rates are extremely low. I don't know about others but you know what else is low these d…

So you buy a stand mixer, make a bunch of dough, bake some bread and sell them. Plenty of ways to offset the cost. The how is not important, the important thing is you can. The worst it can happen is you have to pay exactly the labeled price some 3 months later.

If you're a business, I get it. Most people that are being targeted here though wouldn't fall into that category.

> The worst it can happen is you have to pay exactly the labeled price some 3 months later.

What if you parked the money and it lost value as I described? I think that's a worse case. So this only works if you hold on to the money in a place where it's guaranteed to increase in value (but interest rates are low) in which case the only upside is to offset inflation but I don't see how that would make a significant difference. If you're a business, sure but not for an individual.

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

#215

Post by [deleted] »

_fat_santa wrote: post #93
ceejayoz wrote: post #76

Earlier quoted context omitted.

> It doesn't provide any actual reasons for why BNPL is a bubble nor why such a supposed bubble is about to burst. I'll provide one: it only made any significant sense in the near-zero interest rate levels we had last year. "Split it into four payments for $0 fee" is attractive. Much less so when there's a fee; Amazon's BNPL via Affirm is now up to 10-30% APR from the previous 0%. At those rates, people just put it o…

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…

[deleted]

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

#217

Post by nibbleshifter »

Existenceblinks wrote: post #202
nibbleshifter wrote: post #192

Earlier quoted context omitted.

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.

Yeah there's also non-credit card that has the same fraud protection, contactless, separated balance, plus mobile app that's very fancy that can even pay street food shop.

Its fucking amazing how backwards the US financial ecosystem is, and I don't really understand why.

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

#218

Post by Dayshine »

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.

The UK has stronger consumer protection for credit purchases over something like £100. So even without rewards it's worth it. But yeah, I guess that isn't an eu consumer directive but an actually unique British one?

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

#219

Post by gnicholas »

ceejayoz wrote: post #76
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…

> It doesn't provide any actual reasons for why BNPL is a bubble nor why such a supposed bubble is about to burst. I'll provide one: it only made any significant sense in the near-zero interest rate levels we had last year. "Split it into four payments for $0 fee" is attractive. Much less so when there's a fee; Amazon's BNPL via Affirm is now up to 10-30% APR from the previous 0%. At those rates, people just put it o…

I never used one of these, partly because it seemed like it would create significant friction if I needed to return the item.

What is the return/refund process like with these services? I assume they get the refund from the merchant and then disburse your part of it to you? Does it go smoothly, or do you have to chase things down?

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

#220

Post by asoneth »

epolanski wrote: post #92
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…

In the last decade credit rampage has spread in Europe too, I still remember not long ago where the idea of buying things in installments seemed crazy to the average Italian. The only thing that gets a pass is a mortgage. But buying a phone or computer in installments? How does that make sense? You can't afford it, end of story. I'm also not used to pay interests on my credit card, if I spend 1000 euros, at the end o…

> But buying a phone or computer in installments? How does that make sense? > You can't afford it, end of story.

I'm not saying you are privileged, but I generally only hear this argument from people who have never been poor, or people in countries with functional social safety nets.

Having no computer, phone, car, or washing machine (or an extremely old one) can cost more money and time in the long run due to Capt. Samuel Vimes' boots theory of socioeconomic unfairness (https://moneywise.com/managing-money/budgeting/boots-theory-...).

For example, a lot of government paperwork is now online, if you have to do it at the local library now you have to spend the time to get there. Simple things like managing your passwords or personal documents is harder if you have to run your life from a thumb drive plugged into a public computer. If you have to use a commercial laundromat you will end up spending more money (not to mention time!) cleaning your clothes. If you have no car and can't afford to live in a walkable neighborhood you'll spend a good chunk of your life waiting for the bus. A car helps but a very old car eventually becomes a temperamental money sink that may also result in you being late for work which jeopardizes your income. Being poor is expensive and time-consuming in ways that people who have not been poor typically do not understand.

Of course many people go into debt to buy luxuries they do not need, and that is bad. But going into debt for items that save you time or money in the long run can be a financially sound decision.

Post reply on HN