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Burrito Now, Pay Later

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Re: Burrito Now, Pay Later

#301

Post by margalabargala »

Ekaros wrote: post #204
msm_ wrote: post #38

Earlier quoted context omitted.

I agree, with exception of housing. Most people can't buy home with cash, and for many this is a necessity. But homes are an appreciating asset, which cannot be said about cars or food - this is an investment, actually. But for everything else - cars, phones, electronics, food, subscriptions, jewelry - I 100% agree. Consider two people: * One person has $10k saved, invested into something safe and liquid. Then buys s…

House appreciation is a bad thing. Outside well inflation of replacement, but even there should be some depreciation with wear and tear and aging... Rents not covering most of amortization would make lot more reasonable system to live in.

Houses themselves don't really appreciate in and of themselves, not the way a stock might. It's more that the land price goes up, as does the cost of replacement due to materials and labor prices also increasing.

If you have two identical lots side by side, and you build a house one one and 10 years later build the identical floor plan next door, they will not sell for particularly different prices.

Re: Burrito Now, Pay Later

#302

Post by SirMaster »

thanksgiving wrote: post #185
poincaredisk wrote: post #174

Earlier quoted context omitted.

Why only poor though? There's plenty of middle class people living above their means by abusing credit too. They can deal with the consequences better, but it's equally financially harmful for them

There is really no such thing as a middle class though. We are all n missed paychecks away from being unhoused.

>We are all n missed paychecks away from being unhoused.

So If I am years of missed paychecks away from being unhoused and unfed, what does that make me?

Re: Burrito Now, Pay Later

#303

Post by SirMaster »

mmillin wrote: post #217
twoodfin wrote: post #202

Earlier quoted context omitted.

I finance all my burritos: It’s fantastically more convenient than cash, incrementally builds my credit rating, & I capture some of the efficiency surplus via rewards points. The article makes the point that BNPL packages up almost the same product into a bite-sized, low-risk (for both the borrower and the lender) package, making it available to everyone. Indeed, that does sound like a good thing.

> incrementally builds my credit rating Most BNPL plans are not reported to credit agencies and therefore don’t build credit. But “financing” by paying with a credit card and paying the balance in full would build your credit, still with no interest.

Aren't most BNPL plans credit cards? How many credit card accounts are floating around out there compared to any other type of plan?

Re: Burrito Now, Pay Later

#304

Post by bombcar »

lumost wrote: post #193
ChadNauseam wrote: post #123

Earlier quoted context omitted.

Food is a basic human need, paying someone to make a burrito for you and then hand deliver it to your house is not. There is no shortage of food in america. In brazil, many people don’t eat meat because it’s too expensive, and get the vast majority of their calories from beans and rice. you can also do this in america, but almost no one does outside of college students because food is cheap enough relative to wages t…

Curiously, medieval societies struggled with “usury”. Effectively being a wage earner was a tough game as you might owe rent, have a bad month, or end up overly indebted. Most wage earners eventually became indentured servants or worse. This contrasts with peasants who had permanent land rights and owned everything they produced, and did not have a fixed rent. It’s not just that people don’t understand debt, it’s tha…

We’re worse off than them - usury wasn’t about high interest rates (though that obviously compounds the problem) - it was about whether interest could be charged on personally guaranteed loans at all.

If all loans were required to be non-recourse they’d suddenly have to be reasonable; anyone suffering too much under them would walk away leaving the collateral.

This isn’t even a death-knell for credit cards; it’d just turn them all to secured ones. But it would be deadly to allowing people to overspend and overextend.

Re: Burrito Now, Pay Later

#305

Post by bombcar »

tomjen3 wrote: post #281
InsideOutSanta wrote: post #223

Earlier quoted context omitted.

> But it sounds very patronizing to say the “there’s a lot of poor people who don’t understand credit, so we need to prevent them from having access to any so they don’t get the chance to screw themselves”, so I understand why no one does. OTOH, the article literally says that "data [shows] that those with lower incomes, lower education, and worse credit (redundancies here) are more likely to use BNPL." Most consumer…

We actually don’t. Just make discharging in bankruptcy easier and the problem will solve itself.

If you imagine a continuum from no bankruptcy possible at all, to infinite bankruptcy available at the click of a button - you end up with the realization that the only loans and credit extended would be backed by assets.

If you could declare bankruptcy (Hey. I just wanted you to know that you can't just say the word "bankruptcy" and expect anything to happen.) the moment your credit card bill arrived, no bank would extend you credit beyond what you specifically had on deposit with them to secure it (just like home mortgages are secured by the home).

Re: Burrito Now, Pay Later

#306

Post by SirMaster »

aaronbaugher wrote: post #263
UncleEntity wrote: post #262

Earlier quoted context omitted.

> 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 thing…

Would they go out of business? They make a % of every transaction too.

What % of a credit card companies income is transaction fees vs account interest?

I would argue that a credit card company could probably operate on transaction fees alone. Sure they might need to downsize, but I think the transaction fee would be enough to pay for the minimum infrastructure to run such a company providing the service they provide.

Re: Burrito Now, Pay Later

#307

Post by bombcar »

harrall wrote: post #195
ChadNauseam wrote: post #188

Earlier quoted context omitted.

The lack of food can be explained either by a shortage of demand or a shortage of supply. Many people assume that the demand is there and the supply is the problem - people are desperate for healthy food but no one wants to sell it to them for some reason (the reason is always left unsaid). Instead, they have no choice but to shop at 7/11. So presumably, as soon as a store selling fresh, nutritious ingredients opens…

To support your point, I live in the complete opposite of a food desert but I know a lot of people who don’t know how to cook… like not really. “Cooking” to them going to Trader’s Joes and buying one of those frozen packs. If I gave them a bunch of chicken breasts and broccoli, they would struggle to make it tasty, even if I told them it load it up with fats and sugars. Cooking — as in being able to make any set of c…

This is way more an issue than some realize. A repairman I used to know would always have great deals on amazing kitchen gear. It was always 5-10 years out of date but barely used (Viking oven where the burners had been used a bit, but the oven still had all the plastic bags and manuals in it).

Super valuable houses where nobody ever cooked. He said the only thing he’d ever be called to service was the microwave and the fridge.

But 10 years in, gotta refresh the house!

Re: Burrito Now, Pay Later

#308

Post by zipy124 »

InsideOutSanta wrote: post #280
zipy124 wrote: post #245

Earlier quoted context omitted.

How is that on the other hand? I'm a little confused, as if anything it supports exactly what the person you are replying to was saying as they only mention that they are more likely to use BNPL, it doesn't take the extra step of saying perhaps they shouldn't be allowed to, or should be protected when doing so.

I'm not sure if I understand exactly what you're asking me, but I said "on the other hand" because the person I was responding to was concerned about sounding patronizing by pointing out that laws protect uneducated people, while the article outright states that this targets uneducated people. It wasn't intended to introduce a criticism of what the person I was responding to was saying.

Just to clairfy I'm not assuming you are criticing the commentor, nor am I intending to critisice you, merely that I don't agree the viewpoints are actually that similar at all between the commentor and the article.

The article doesn't state they target uneducated people, it states that they use it more which are subtle but key differences. Furthermore "poor people who don’t understand credit" is not the same category as "lower incomes, lower education, and worse credit (redundancies here)". Even if we assume they are the same group of people (by making an equivalence between understanding of credit and general education/income/credit which we know is not a great assumption) the statements are different anyway.

The article is talking about an observed statistic, BNPL seems to be more prevalent in lower income, lower education and worse credit populations (we actually have really poor data on private credit so this should be taken with a grain of salt). The commenter however is making the claim that this is because they have a bad understanding of credit, and also implicitily that BNPL is bad and a bad use of credit.

These are therefore different as we can easily see for instance that a probable cause could for example be that people with no savings are more likely to borrow to cover spending in-between paychecks for example, or when emergency expenses change their cash-flow. This would not however fit with the commenters viewpoint, and is actually a good use of credit.

Re: Burrito Now, Pay Later

#309

Post by bluedino »

yurishimo wrote: post #285
bluedino wrote: post #241

Earlier quoted context omitted.

Most people use credit cards vs debit card for daily purchases in the USA because it's a safer transaction and you get points.

Most people (statistically) are also broke. The points mean nothing if you’re paying 22% interest on the 3 other cards that you couldn’t even afford to do the balance transfer on. Banks only offer points because they make money on average. By using these products, you are directly benefitting from the financial illiteracy of the most vulnerable parts of our society. I refuse to be part of that system out of principal…

Except for when say, your utility company withdraws the wrong amount from your checking account (using your debit card), causing you to be overdrawn, and then you have no money for two weeks while they sort it out. Of course, there's an argument against auto pay somewhere in there...

Credit card you can just go on with your life.

Re: Burrito Now, Pay Later

#310

Post by bombcar »

batty_alex wrote: post #236
YarickR2 wrote: post #232

Earlier quoted context omitted.

And what would increasing the income do for changing the state of mind, or for better time management ?

Are you suggesting people are poor because they don't have good time management?

There are certainly “innocent” poor if you want to use the term - those who are disadvantaged through no fault of their own and are working hard to get out of it.

And just as certainly being poor can be a result of bad choices and other things. Denying that either is possible is a recipe for disaster.

What we should do is work on the things that will work for those who need help and help them improve their skills or provide them a structured environment where are those skills are not necessary.

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