Not victim blaming. Do not do payments. You either have the money or you don't. Save your money, buy it when you have it fully.
Would you say that's the case for bigger ticket, long lived items, such as houses or cars?
Why I'll never use Affirm again
121–130 of 298 posts
Re: Why I'll never use Affirm again
#122Earlier quoted context omitted.
Indeed. I would just pay it again. 25% of $271 is cheaper than a credit score hit. You can simultaneously dispute with the Attorney General office.
You should probably read patio11's article on fighting credit agencies instead. https://www.kalzumeus.com/2017/09/09/identity-theft-credit-r...
This was a fascinating read.
Re: Why I'll never use Affirm again
#123I have no idea what an Affirm is supposed to be; would people please include some context or otherwise try to be helpful when they post service complaints?
Yeah not much background in this article. Affirm is a "buy now, pay later" service (BNPL). It's basically just personal loans with the addition of a fee charged to merchants (on the premise that providing financing will attract more customers to the merchant). Very similar to the layaway offered by some merchants directly but Affirm offers this as a service.
Affirm is a unicorn and IPO'd in 20221. It has quite a few competitors in the BNPL space like Klarna and Afterpay. So far they all lose a lot of money.
Re: Why I'll never use Affirm again
#124Earlier quoted context omitted.
Affirm doesn't list their B2B pricing on their website, but credit cards typically charge up to 5% of the total purchase price in processing fees. It wouldn't be hard for a challenging upstart to make a solid business that just charges less. That's probably not the primary revenue driver for most BNPL companies though. You've also seen credit card companies change their offerings to compete with the BNPL model. One o…
> credit cards typically charge up to 5% of the total purchase price in processing fees Source? I thought it’s 2 to 3%.
Credit Cards are 2-4% + 0.1-0.3/transaction depending on your volume. Small businesses would pay the max on the flat and near it on the percentage.
Affirm and similar were 6% last time I talked to them (admittedly 3-4 years ago), and represented a far superior value proposition for a lot of customers because it gives them a longer period of time and forces them onto a payment schedule.
Re: Why I'll never use Affirm again
#125I'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.
The appeal, as I understand it (and I'm 100% an out-of-his-field armchair analyst here), is that this is loan sharking with extra steps ("late fees") for those of us with the worse credit scores that can't get better options. I forgot the exact number, but when I've done the math how much maximum interest you accrue by missing every payment is well beyond usury, as I recall it gets you above 30% interests in 2-3 months (and caps there, which I guess is the silver lining), where as I've considered "interest" to be late fees over the loaned amount.
For every person using this to their advantage as a credit tool, I bet there are a dozen who are just sinking deeper into their debt quick sand.
Re: Why I'll never use Affirm again
#126But the developers got all their tickets closed this sprint. Because at the end of the day, ticking boxes is what matters, not actually providing business value. Just ask your scrum "master".
I find it hard to blame anybody but the company leadership for issues like this. They took on responsibility for the company, both its successes and failures.
Re: Why I'll never use Affirm again
#127Is it normal to do a chargeback against a loan provider? I was under the impression that it’s more for “services rendered” type of situations — which the lender fulfilled by providing the loan. I would expect there to be pure chaos if I did that to any of my lenders. I’ve just never heard of this sort of situation so I’m curious as to what the financial wisdom is.
you can file a chargeback against anyone if you paid them with a credit card, you can file for ACH reject if ACH payments.
Re: Why I'll never use Affirm again
#128This is kind of OP's fault, right? I don't think it was appropriate to initiate a charge back on a payment to affirm since they provided their service to OP, that is they already paid for whatever OP was buying. I have a feeling that timing between OP opening the chargeback and the shipping of the item was actually coincidental. I'd think if you paid affirm and the merchant hadn't shipped the item, then your recourse…
Respectively disagree, but regardless the customer service flow is unacceptable and most of the point of the post IMO.
Re: Why I'll never use Affirm again
#129Earlier quoted context omitted.
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…
If $X spooks someone for a discretionary spend item, then in most cases it’s a bad financial decision for them to pay $X just spread over Y months.
This is a problem with the whole credit system, right? Yes it is a bad system.
Re: Why I'll never use Affirm again
#130Earlier 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.
> because spreading the payments out over 12 months means more investment capital
This is essentially borrowing money to invest. It doesn't matter if the investment makes money or loses money the lender will expect payment. This strategy can make a lot of money, but it's also ruined many people. One key thing to watch while implementing this strategy is your debt to assets ratio. Also understand that during a market crash this ratio might change suddenly and dramatically.
I don't make small (sub $10k) purchases on credit, period. Not only is it somewhat risky but it also encourages overspending because it makes the 'pain' of spending money decrease. As for your $2000 mattress, I saved way more money by buying a $600 mattress instead and I sleep like a rock.