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Why are people upset about this? Huge win for the _responsible_ consumer. If something is 0% interest, its free money.

by rykuno 3y ago

rootusrootus 3y ago
My guess - people think it is fooling unsophisticated customers into making poor financial choices and buying things they should know they can't afford. But I'm with you, I don't see it as a big deal. I routinely take advantage of the 'no interest installment plan' for my Apple toy purchases on my Apple card. Why wouldn't I want to hold off on giving them my money for as long as possible, especially in an inflationary environment?
- BenSahar 3y ago
  Even outside the current inflationary period, I like using no-interest financing to give myself the option of paying for something over time. I don’t typically finance anything I can’t afford to buy outright. I just like to feel like I have extra breathing room in the case of some emergency.
not_your_vase 3y ago
Responsible people have already a lot of easy choices for short term free money. Banks almost literally throw credit cards at people, with 45-60 days without any charge (and even with cashback) - assuming that you can afford it. BNPL usually don't target these people.
kimbernator 3y ago
My credit card is 0% interest if I pay it off, and I get all sorts of benefits from it. Why would a responsible consumer use this over a credit card?
zeroonetwothree 3y ago
Credit cards already let you pay for stuff up to 60 days later with 0% interest. This new service is shorter term than that.
gmd63 3y ago
If a loan is 0% interest, I can guarantee you it comes with a price. And it's most likely paid by people who don't understand it.
- lxgr 3y ago
  That is often the case, but not always: It can make perfect sense for a merchant to effectively pay the interest on your purchase, if it means the difference between making a sale now (and getting a bit less than list price) vs. sitting on inventory. If it's not the merchant paying for the loan, the story is very different though.
pythko 3y ago
It’s free to end consumer, but these schemes make money by charging a percentage to merchants. And those merchants will compensate by bumping up their prices a little to cover the transaction costs. In the best case, these are pointless services that only transfer money to the finance industry. In the worst case, they incentivize people to spend money on things they can’t afford (and also transfer money to the finance industry).
lxgr 3y ago
If your credit card pays you back 0% in rewards/cashback, you're the one leaving money on the table. If you pay a credit card in full, you also don't pay interest, and you usually get at least a month to do so as well. If you don't pay on time, though, you lose big – with both credit cards and BNPLs.

Why are people upset about this? Huge win for the _responsible_ consumer. If something is 0% interest, its free money.

by rykuno 3y ago

Why are people upset about this? Huge win for the _responsible_ consumer. If something is 0% interest, its free money.

My guess - people think it is fooling unsophisticated customers into making poor financial choices and buying things they should know they can't afford. But I'm with you, I don't see it as a big deal. I routinely take advantage of the 'no interest installment plan' for my Apple toy purchases on my Apple card. Why wouldn't I want to hold off on giving them my money for as long as possible, especially in an inflationary environment?

BenSahar 3y ago
Even outside the current inflationary period, I like using no-interest financing to give myself the option of paying for something over time. I don’t typically finance anything I can’t afford to buy outright. I just like to feel like I have extra breathing room in the case of some emergency.

not_your_vase 3y ago

Responsible people have already a lot of easy choices for short term free money. Banks almost literally throw credit cards at people, with 45-60 days without any charge (and even with cashback) - assuming that you can afford it. BNPL usually don't target these people.

kimbernator 3y ago

My credit card is 0% interest if I pay it off, and I get all sorts of benefits from it. Why would a responsible consumer use this over a credit card?

zeroonetwothree 3y ago

Credit cards already let you pay for stuff up to 60 days later with 0% interest. This new service is shorter term than that.

gmd63 3y ago

If a loan is 0% interest, I can guarantee you it comes with a price. And it's most likely paid by people who don't understand it.

lxgr 3y ago
That is often the case, but not always: It can make perfect sense for a merchant to effectively pay the interest on your purchase, if it means the difference between making a sale now (and getting a bit less than list price) vs. sitting on inventory. If it's not the merchant paying for the loan, the story is very different though.

pythko 3y ago

It’s free to end consumer, but these schemes make money by charging a percentage to merchants. And those merchants will compensate by bumping up their prices a little to cover the transaction costs. In the best case, these are pointless services that only transfer money to the finance industry. In the worst case, they incentivize people to spend money on things they can’t afford (and also transfer money to the finance industry).

lxgr 3y ago

If your credit card pays you back 0% in rewards/cashback, you're the one leaving money on the table. If you pay a credit card in full, you also don't pay interest, and you usually get at least a month to do so as well. If you don't pay on time, though, you lose big – with both credit cards and BNPLs.