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Burrito Now, Pay Later

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Re: Burrito Now, Pay Later

#261

Post by SOLAR_FIELDS »

bluedino wrote: post #242
poincaredisk wrote: post #182

Earlier quoted context omitted.

>This is an area where government regulation is actually required, all transaction fees should be disclosed and charged as a surcharge on the base purchase price, whether it's a credit card or BNPL Btw. in Europe the card thing was solved differently. First, most people use debit cards, not credit cards. Second, card fees are capped at 0.2% which makes it actually a cost saving measure (cash processing is not free).

People use debit card in the USA as well

The difference is that in the States a cash discount is only rarely offered. It’s common in some areas (gasoline often costs less when you pay with debit, contractors and other similar small businesses will usually pass that 3% on to the consumer as well) but not others. Much more common is that the business charges the same for both (basically every direct to consumer retailer charges same for both debit and credit).

The indirect result is that people with debit cards and cash payers are actually indirectly subsidizing credit card holders in the States. You’re actually operating at a disadvantage if you don’t funnel most of your spend through a credit card in the States

Re: Burrito Now, Pay Later

#262

Post by UncleEntity »

flakeoil wrote: post #228
aianus wrote: post #191

Earlier quoted context omitted.

You can pay the BNPL with a credit card to take advantage of both interest-free periods and get credit card points. There is really no reason not to use BNPL, even if you can pay cash.

Yes, there is. You take on a risk of forgetting to pay or that there is missing cash on your account so that the payment does not get done. Now you all of a sudden have to pay interest. And for what benefit, just to lend the cash for free for a month? What would you do with that cash for one month which is so profitable and risk free to compensate for the quite high risk of missing one of those BNPL invoices?

> What would you do with that cash for one month which is so profitable and risk free to compensate for the quite high risk of missing one of those BNPL invoices?

Not arguing for this credit scheme but in my personal case I use my credit card for everything and pay it off in full on the due date. The money sits in my savings account making a minuscule, but not zero, amount of interest while the card gives "cash back on purchases". Making a completely wild guess this nets me around $50 a month in "free" money.

Don't get me wrong, this isn't some plan to "hack the system" just my debit card expired and I never got around to getting a replacement so the credit card is all I have. But, free money is free money...

Re: Burrito Now, Pay Later

#263

Post by aaronbaugher »

UncleEntity wrote: post #262
flakeoil wrote: post #228

Earlier quoted context omitted.

Yes, there is. You take on a risk of forgetting to pay or that there is missing cash on your account so that the payment does not get done. Now you all of a sudden have to pay interest. And for what benefit, just to lend the cash for free for a month? What would you do with that cash for one month which is so profitable and risk free to compensate for the quite high risk of missing one of those BNPL invoices?

> What would you do with that cash for one month which is so profitable and risk free to compensate for the quite high risk of missing one of those BNPL invoices? Not arguing for this credit scheme but in my personal case I use my credit card for everything and pay it off in full on the due date. The money sits in my savings account making a minuscule, but not zero, amount of interest while the card gives "cash back…

Yeah, as long as you pay reliably (ideally automatically) so you never get hit with any fees, it's fine.

But if everyone did that, these companies would go out of business. So they're clearly counting on a significant percentage of users failing to do that, and sticking themselves with the fees in the fine print. And those tend to be the folks who can less afford it and are less equipped to reliably handle such things, making the enterprise feel predatory.

Re: Burrito Now, Pay Later

#264

Post by pc86 »

dokyun wrote: post #78
pc86 wrote: post #71

Earlier quoted context omitted.

You state this as if it's a fact but I think most people would disagree. If morality is subjective, then that means there is nothing objectively wrong with murder, rape, pedophilia, chattel slavery, or any number of things that most civilized people would find abhorrent. I'm not even trying to make a religious argument about the source of some objective morality, I don't think it's necessary to solve that to answer t…

The ancient Romans had far less of a problem with all of those things than many people do now; would you consider them uncivilized?

I said nothing about how "civilized" anyone is. You can be a civilized person and be completely immoral. They're unrelated.

Re: Burrito Now, Pay Later

#265

Post by skybrian »

kweingar wrote: post #181
benlivengood wrote: post #75

Earlier quoted context omitted.

Credit in general is an incredibly regressive tax; only the poorest end up paying much interest and it's a much larger fraction of their total cash flow. I can get between 2% and 4% cash back on all purchases on a credit card that I pay off monthly with a zero-fee ACH transfer, paying no interest or yearly fees. I literally take poorer or less financially secure people's money that they spend on credit card interest.…

Highly recommend this podcast by patio11 explaining that poor people are not funding credit card rewards programs. https://www.complexsystemspodcast.com/episodes/credit-card-r...

I am normally a fan of patio11, but that transcript is a disorganized mess of quotations and side comments. Good luck finding a main argument.

The original essay also cannot stick with making a single argument, but is easier to read:

https://www.bitsaboutmoney.com/archive/anatomy-of-credit-car...

Re: Burrito Now, Pay Later

#266

Post by flakeoil »

UncleEntity wrote: post #262
flakeoil wrote: post #228

Earlier quoted context omitted.

Yes, there is. You take on a risk of forgetting to pay or that there is missing cash on your account so that the payment does not get done. Now you all of a sudden have to pay interest. And for what benefit, just to lend the cash for free for a month? What would you do with that cash for one month which is so profitable and risk free to compensate for the quite high risk of missing one of those BNPL invoices?

> What would you do with that cash for one month which is so profitable and risk free to compensate for the quite high risk of missing one of those BNPL invoices? Not arguing for this credit scheme but in my personal case I use my credit card for everything and pay it off in full on the due date. The money sits in my savings account making a minuscule, but not zero, amount of interest while the card gives "cash back…

> ...while the card gives "cash back on purchases".

Sure, but cash back is a kind of marketing trick which makes the card user more willing to spend and use their card. It's this little extra which pushes you over to buy something because, hey, I get my cash back.

There is no free lunch. Someone has to pay the cash back and we like to think it is the merchant, but in the end it is the consumer who pays for all these cash backs and card fees.

Re: Burrito Now, Pay Later

#267

Post by UncleEntity »

socalgal2 wrote: post #79
rtpg wrote: post #72

Earlier quoted context omitted.

Your statement is pretty subjective! Not going to defend gambling but "junk food" and "overpriced status-symbol vehicles"? Digital goods as an entire concept? You can think it's all for the stupids, but I'm not seeing how it's some objective truth. Even if you're some stoic who thinks spending money on leisure is just incorrect at a fundamental level, but I think you're going to find yourself in the minority there.

No, rather I think I can scrape by for the few days it takes to get ahead of the curve for something as cheap as a burrito and then next month I can afford 5 burritos for every 4+interest I could only afford before. Paying for a PS5 or TV on credit I can see because it might take me months to save. But saving for a burrito is arguably something I shouldn't even have to save for in the first place.

> But saving for a burrito is arguably something I shouldn't even have to save for in the first place.

I'm guessing you never has so little money that the calories you spent to get cheap food on Taco Tuesday was probably more than what it took to pedal your bike up to Del Taco? Yeah, that was a soul-crushing day.

Honestly, this would have been a bad plan for me because it often came down to the choice between 'go get a cab' and 'starve to death' as I could get some cash calls immediately after picking up a cab in order to not starve to death.

This scheme is clearly targeting the financially irresponsible, like myself, to pawn off the debt on others with their Burrito Backed Securities. Maybe we can take a moment to reflect on how the Mortgage Backed Securities debacle worked out?

Re: Burrito Now, Pay Later

#268

Post by UncleEntity »

twoodfin wrote: post #206
qq66 wrote: post #112

> One reason is that someone’s or a company’s income doesn’t always align perfectly with when they want to buy things. Financing should be used for things that provide value over the time horizon it takes to earn the money to fully pay for them. If you finance things for less than that time horizon, you just end up getting more and more underwater. If you finance something that delivers value for ~6 hours then you pr…

What’s the source of this “should”, and why doesn’t it apply to the majority of businesses that finance the cash flow to sustain short-term operations?

Maybe because the virtual zero-interest rate policy from the Federal Reserve skewed the market in ways is "should" have not gone?

Would a business to this if they were paying more interest than the revenue generated from the time of the loan period? Or would they take a deep and hard look at their operations and decide that maybe the CEO doesn't get as big a bonus this year?

Sure, it makes sense to finance business expansion or whatever but if they are/were just floating some capital which has nothing to do with their core business of making widgets then this clearly falls into the "should" category.

Re: Burrito Now, Pay Later

#269

Post by shermantanktop »

akoboldfrying wrote: post #164
shermantanktop wrote: post #143

Earlier quoted context omitted.

“Fear of sounding patronizing” sounds like a cocktail party problem. If that’s stopping someone - being made fun of by another member of their elite class - that’s a recipe for failure.

Being careful not to sound patronising towards the poor in public is one of the most ironclad unstated rules of wealthy social groups in the West. Breaking it immediately reveals one to be a member of the outgroup ("gauche"/"nouveau riche"/"tasteless"/"a philistine"), which will cause other wealthy people to break ties for fear of being tarnished by association. Since relationships with other wealthy people are a cor…

Exactly, perfectly put. It becomes an ingroup code, with very little to do with the actual people that are being discussed.

But if people want to have a serious conversation, it’s intellectually dishonest to steer around topics in that way. That’s how you end up with clueless policies.

Re: Burrito Now, Pay Later

#270

Post by catlikesshrimp »

helge9210 wrote: post #253
catlikesshrimp wrote: post #221

Earlier quoted context omitted.

>"This contrasts with peasants who had permanent land rights and owned everything they produced, and did not have a fixed rent" There are places where they didn't own anything. Decades ago I read that at some point each feudal lord coined his own currency for his peasants. If a peasant escaped, he wouldn't have means to take anything with him. Same in Russia. A couple centuries ago, serfs came with the land. They cou…

Correction: slavery in Russia/Soviet Union ended in 1974 when all the rural residents got passports and with it the right to leave the collective farm and change the profession.

Correction https://en.m.wikipedia.org/wiki/Emancipation_reform_of_1861

Serfdom ended in 1861.

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