Earlier quoted context omitted.
> We should have systems in place where people are guaranteed to have their issues remedied. That's basically what a lawsuit is--you sue someone and if they don't respond, you generally win by default, but if they do, you have the burden of proving your facts.
You don't just have to prove your facts. You also need to be acquainted with the current law and literally centuries of case-law. The burden is immense for an individual.
Why I'll never use Affirm again
101–110 of 298 posts
Re: Why I'll never use Affirm again
#102Earlier quoted context omitted.
> credit cards typically charge up to 5% of the total purchase price in processing fees Source? I thought it’s 2 to 3%.
Sure, 2-3% if you're WalMart. If you're (small respectable retailer) you'll be paying three times that and if you're a tiny retailer you'll be paying five times that.
Re: Why I'll never use Affirm again
#103One point not brought up is that Chase may not be an honest broker here. I've seen both sides of a "charge back" that had the bank lying to both parties while soaking up a bunch of fees. Telling the customer that it had been resolved in the company's favor while telling the company that it had been resolved in the customer's favor. Taking both the funds and fees for themselves. Affirm might well be correct that the b…
Under the hood raising a chargeback means your bank send the acquiring bank a message (with an exponent and evidence) that immediately reverts the original transaction and transfers money from the acquirer to the customers bank.
The merchant via the acquirer can then issue a message that does the opposite, again with an explanation and evidence. Eventually the card network steps in and makes a final decision, but they charge a significant fee to do this, strongly encouraging the parties to resolve the situation between themselves.
More importantly there is no “win” message or “give up” message. Instead there’s a set period of time each party is allowed to send a reversing message, after that time period the last person to send a message “wins”.
The periods of time involved are significant, ranging from 30 to 90 days depending on where in the process you are. As a result the bank could well say they’ve given up on the chargeback, and allowed the merchant to win. But the merchant can’t be sure of that until the countdown timer on a reversal has expired.
To make things even worse, most bank employees have no idea how payments actually work. They may well be looking at a tool that says they’ve “reversed” the chargeback. But under the hood that could just mean their system won’t send any further messages, allowing the other party to eventually win.
Re: Why I'll never use Affirm again
#104I've never understood the appeal of using a product like Affirm, especially if you already have a credit card. Credit cards already give you a 30-day grace period before purchases start accruing interest. Using Affirm to extend that to 42 days seems inconsequential. It seems like their target customer are people bad with credit, which would make them predatory.
Re: Why I'll never use Affirm again
#105I've never understood the appeal of using a product like Affirm, especially if you already have a credit card. Credit cards already give you a 30-day grace period before purchases start accruing interest. Using Affirm to extend that to 42 days seems inconsequential. It seems like their target customer are people bad with credit, which would make them predatory.
0% APR over 12 months for a big ticket purchase like a mattress in an inflationary environment and a bull market can easily equal an additional 5-7% discount on 2000 dollars. Admittedly this is not how most people are using Affirm, but it's definitely been useful to me in that way.
Re: Why I'll never use Affirm again
#106How true that second claim is and whether Affirm is merely yet another predatory lender, I will leave as an exercise to the reader.
Here's a good deep dive on the BNPL model from Bits About Money: https://bam.kalzumeus.com/archive/buy-now-pay-later/
Re: Why I'll never use Affirm again
#107Earlier quoted context omitted.
IMHO they are the title/payday loan operators of the web, like their real world counterparts they prey on the poor.
Unlike those real-world counterparts, they don't make money. Also unlike the real-world ones, they're making loans so risky that they're apparently having issues selling even the highest-rated ABS tranches right now.
What? How are they in business, then? Is this just the reverse side of "the market can stay irrational longer than you can stay solvent"? (I'd assumed they ended up being profitable off of people not paying things off in the 0% time)
Re: Why I'll never use Affirm again
#108Earlier quoted context omitted.
0% APR over 12 months for a big ticket purchase like a mattress in an inflationary environment and a bull market can easily equal an additional 5-7% discount on 2000 dollars. Admittedly this is not how most people are using Affirm, but it's definitely been useful to me in that way.
Bingo. That's why I've done payment plans as well. Not because I couldn't just buy the thing, but because spreading the payments out over 12 months means more investment capital.
Re: Why I'll never use Affirm again
#109Earlier quoted context omitted.
Hi! Affirms scores (evaluates the risk) of each transaction in real time, which allows then to have reasonably low bad rates. Very few lenders can do it.
Until there's a credit crunch or a recession, in which case all that "real-time" risk management will be moot and losses will be massive.
Re: Why I'll never use Affirm again
#110Earlier quoted context omitted.
Spread out 0% Apr over 5 months instead of 2? Agreed about them being predatory. They literally lose money for every person that uses their service in the recommended/correct way, and only make money when someone flubs a payment.
That’s not how the business model works (or how they’d want it to work anyway). Affirm makes money on transactions in the “correct” way via very high merchant fees. Merchants will pay affirm a large fee for conversion benefits (e.g better a customer pay $700 even if I lose $50 to affirm fees than for them to pay $0 because they got spooked by the price). Affirm gets the fee. They suffer risks from inflation and nonpa…