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

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

#241

Post by edmundsauto »

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.

It decouples your obligation to repay from the service rendered or product delivered. This can be good or bad, just like a software abstraction.

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

#242

Post by Rebelgecko »

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?

For a lot of people the "American dream" is going to college and buying a house, even if your family can't support those aspirations. That's not doable for the vast majority of Americans unless they take on some amount of debt. And tbh it's often a good idea from a financial perspective as long as you're thoughtful about when to use leverage

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

#243

Post by Rebelgecko »

kortilla wrote: post #26
yladiz wrote: post #11

Earlier quoted context omitted.

Okay, I repeat my question above: if you can afford to pay over 12 months (meaning, you don't go into debt to do so), what's inherently wrong with doing it instead of waiting 12 months and paying all at once, besides ideological reasons?

It’s financially reckless. What if you lose your job?

Ideally you have an emergency fund so it doesn't matter. But compared to paying the cost up front I think you'd be better of using BNPL actually. You'll have more cash on hand to pay for necessities like food/rent, in exchange for a ding to your credit score if you don't have enough money left over to pay the monthly payments on the camera you use for your budding photography business

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

#244

Post by throwaheyy »

nibbleshifter wrote: post #217
Existenceblinks wrote: post #202

Earlier quoted context omitted.

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.

This applies to more than just banking. They were the first to innovate. Thus they get stuck with first generation technology while other countries leapfrog ahead.

Example: back in 2009 I got an American Express card with contactless technology. It was one of the transparent cards with the blue square in the middle so you could see it right inside the card. Problem was, no store had a terminal it could be used with. After a few years, Amex gave up on it and my new cards didn’t have it. Meanwhile the rest of the world is starting to roll it out. After a few more years (last 4-5 years) cards finally got contactless again, after the rest of the world had had it for years.

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

#245

Post by epolanski »

asoneth wrote: post #220
epolanski wrote: post #92

Earlier quoted context omitted.

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.…

I agree with all you say, but I don't see the connection between paying front up or in installments.

A decent laptop can be bought on craiglist or similar websites for 150/200$, and you can get a decent mid tier laptop from few years ago, a smartphone would be half of that.

Thus, where's the jump to buying a brand new computer in installments?

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

#246

Post by hyperman1 »

throwaheyy wrote: post #244
nibbleshifter wrote: post #217

Earlier quoted context omitted.

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

This applies to more than just banking. They were the first to innovate. Thus they get stuck with first generation technology while other countries leapfrog ahead. Example: back in 2009 I got an American Express card with contactless technology. It was one of the transparent cards with the blue square in the middle so you could see it right inside the card. Problem was, no store had a terminal it could be used with.…

There is more to it than that. Europe tends to write laws with consumer protection in mind. The US tends to treat companies and people as equally powerfull, with the courts protecting both. After decades of different legal philosophy, we see these differences:

Europe tends to be a whiney nanny state, but lacking enforcement means companies can violate legal rights for years and then be very surprised when they get slapped with more and harsher enforcement. Facebook is learning this right now.

The US, meanwhile gets 'adequate protection' against fraud, credit scores, identity theft, frivolous lawsuits and binding arbitration. If you're unlucky, the US gov and corporate system will grind your life to pulp for no reason, and the powers that be won't even notice they did something

As an european, I vastly prefer what I got above the US system and avoid credit cards as an unsecure mess that gets your money stolen. But maybe that's just because I never learned to navigate the US system.

Clearly both systems can function and both have big holes.

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

#247

Post by wyuenho »

barbazoo wrote: post #214
wyuenho wrote: post #210

Earlier quoted context omitted.

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 a…

If you parked the money and it lost value, it doesn't matter, because that's only relative to everything other than the stand mixer you bought. The price of the stand mixer is fixed at the time of purchase, it doesn't go up as time goes by.

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

#248

Post by heswrong »

epolanski wrote: post #245
asoneth wrote: post #220

Earlier quoted context omitted.

> 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.…

I agree with all you say, but I don't see the connection between paying front up or in installments. A decent laptop can be bought on craiglist or similar websites for 150/200$, and you can get a decent mid tier laptop from few years ago, a smartphone would be half of that. Thus, where's the jump to buying a brand new computer in installments?

>Thus, where's the jump to buying a brand new computer in installments?

Sometimes you're "forced" to it. Me, a third-world student, buying a laptop expecting the thing to last at least 7 or 8 years before it becomes obsolete. Now, you have to drop something around 1000 USD when your monthly income from being a cashier at the local supermarket is 250ish.

Also (you can, but) you wouldn't be buying used because there are plenty of scammers around, no warranty in used electronics, and with such a large investment (4x your monthly salary) you become REAL risk-averse real fast. What do you do? You go to an appliances store and buy your new laptop in 18-24 instalments, with a 12-month warranty (or even more if the extra price for the extended time is worth it/low enough).

Guess from where I'm typing this and if there are any instalments left? :D

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

#249

Post by muro »

e63f67dd-065b wrote: post #146
dusted wrote: post #61

Earlier quoted context omitted.

I disagree, it's death by a thousand paper-cuts. Having my funds reduced to 91% the rest of the year is waaay worse for me, than having it reduced to ~0% the rest of the month. Because, the rest of that month, I'll be super-vigilant, I'll be acutely aware of why I have less money than normally, I know not to make anymore purchases, I know that this month is not for an extra treat, because I bought the other thing. Ne…

This looks like a weakness in managing your personal balance sheet. You're willingly sacrificing cash flow and interest to simply balance sheet management, which may be worth the tradeoff for some but for those of us with the required skills it's really not.

There are better ways to spend life than optimizing cash flow.

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

#250

Post by TomSwirly »

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…

> The amount of leverage each is person is willing to take depends on their risk appetite.

You say "risk appetite" like it's a preference for vanilla over chocolate, but we are in fact talking about people enticed into making objectively bad financial choices that are destructive to their lives.

Yes, people are stupid. People are very old or very young, or don't speak the language well. None of these are excuses to lure people into bad financial decisions.

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