Have you ever purchased your own car without a co-signer? I would think it would be a good idea to start a credit history with something not so expensive in order to purchase a car in the future.
@@Izzy-hr3cw yes!!! 👏 I love hearing the younger generation being smart with their money 💰 keep it up. Debt is a huge trap that’s incredibly hard to get out of.
I think when it comes to luxury it shouldn’t be like this, in my opinion if you can afford it don’t have it, it’s not worth the debt people can get into for a pair of Louboutins.
they use gambling science to get people addicted, even rounded shapes on the buttons to seem more friendly! note the child-like, less threatening use of pastels?
@@sanamhusain691 Gross. Is it just me or is it no longer middle class 1800's England where the belief of "the Great Unwashed" is still a thing 🙄 It's 2021, stop with the stereotypes and assumptions about the poor and their life situation. You're most likely part of the 99% yourself.
Gorgeous blazer Sophie! :) Thank you for addressing this subject after my comment! I‘m 25yrs old, just got my master degree and I do have to agree: As a young person it‘s so tempting to use something like Klarna, cause the way it‘s advertised seems so easy. The design is simple and appealing to a younger audience without actually talking about the possible dangers of debt. It makes it look like designer items have to be something essential in this "flexing culture“ without actually thinking about the purpose of luxury.
Hey Alexander!! 🙌🏽🙌🏽🙌🏽🙌🏽 I’m really pleased to see your name here and that you saw the vid - thank you for such an interesting video request. You really got me thinking on this one! Yes, I too thought that the visual aspect of Klarna and the marketing (it being pink and very millennial looking!) Doesnt make it feel like you’re actually getting into a debt. I think though that for all those who suffer from it, there will be those whom it teaches budgeting, repayments and debt management to. I do t know, Just a thought! ☺️ Hugs xxx
I don’t feel the same “shopping high” when paying in instalments, to me being able to pay for it outright is part of the enjoyable experience. (Still using a credit card for the points tho) Great topic!💖
I agree. I pay with credit card because I accumulate points and perks. However when the bill comes and I am able to pay it off in full I feel really good
Agreed! These are way better than cc. You have no choice but to pay it back within a certain time period. With cc most ppl tend to end up dragging the payments out...compiling interest.
I used debit for years to ensure I spent and saved well but I now have a discover. I get cash back they match at the end of the year. I am sure there are other options but I haven’t changed my lifestyle, have automatic payments of the full amount, and have earned almost $40 so $80 total. Pretty cool!
Hi friends! Thanks to all of you who responded to my post on here the other day, and shared with me your point of view on Buy Now, Pay Later services! Ive looked into these payment services a lot over the weekend and my verdict is that I think these services (where you pay-off an item within 3 months, interest free) are probably handy and a good thing if you plan on buying one big thing and paying it off within those 3mnths. But I feel strongly, they’re only good if you use them responsibly.... I worry about people getting sucked-in and into debt. But if you’re using it responsibly, in theory it lets you keep capital in your bank for as long as possible, and it can allow you to purchase something in more manageable payments. I can also see it being useful for if you buy and return lots of items, without waiting for refunds. I personally wouldn’t use it for luxury, but I might consider it for furniture etc. BUT, I don’t think using it for luxury is a bad thing if it’s what you want to do, and if the monthly payments aren’t going to be difficult to you. What do you think?xx
I think these spilt payment things are a bad idea. If you can’t afford it before a split payment maybe you shouldn’t be buying it. Sorry harsh but it’s logical. I was just taught to buy what you can afford.
I can speak to this with my personal experience. About 15 years ago, I got myself into a TON of debt which was a huge mistake. I now only purchase items that I can pay for in full. It was hard going thru that but it was a GREAT life lesson.
I used Klarna a number of times, never had any problems and I like that my funds are not held for a long time during returns especially during lockdown now that we are forced to shop online. For me also the best thing about Klarna is that when I shop in stores I never used before, I don’t have to leave my card details with all these different companies that I might only use once. If Klarna messes up, at least I’ll know whose responsible.
Delighted you’re addressing this, I know for a lot of people it’s so handy but the way it gets pushed on like university age is concerning. It reminds me a little of you saying about the banks with their uni stalls & the free gifts. Keep up with the topical videos, I thoroughly enjoy them ❤️
Great to see your name here my friend!! I totally agree with you, I think these banks and institutions pray on younger people reaching that age of wanting things that are out of reach. Ahh, you’ve just reminded me of the banks at my uni on the first day of joining. “Free crayons and a teddy bear if you sign-up to our £2k overdraft” 🤣🤣🤣🤣madness how they can do that, if my parents were there it wouldn’t have happened! Hugs to you xx
@@SophieShohetOfficial Thanks for replying, I remember when you first said that it sounded it insane but I remember we had in my uni days too (early 2010s) but maybe the freebies more built around other financial products (I vaguely remember something with phone insurance or something like that, still something young adults would want but less on the nose). I am doing good, speaking problems with returns etc, I’ve been trying to get a refund and buy the same pair of shoes since January. It’s a saga, so I defo can see using these services to avoid these situations.
I use it for items I will have to wait for. For example, we recently redecorated our living room and wanted a new ottoman to replace our coffee table. It was going to take 10-12 weeks to arrive because they are made to order with the company we were purchasing from. I knew we would have to save for 2 months to afford it and then, adding on the construction time, it meant we would be getting it 5months later. Therefor it made sense to split the payment over 3 months interest free. Pay while you wait. However I can see it easily spiralling out of control. You split a payment with asos because you don't want to pay £100 in one chunk. Then you do the same on cult beauty and Topshop etc. Before you know it your split payments exceed the amount you had originally baulked at paying and now you are committed to that for the next 3 months.
under the old lay-by system in my mother's day the store would put away the item and you'd pay for it and THEN get it when fully paid off. That way you had the discipline of saving and you knew you were getting the item and no interest rates or penalties to pay for and then the reward of getting the item. But then stores got sick of being left with unpaid for items which they'd have to return to stock, and it was expensive for them to administer. But it was far better for the customers. My mother used it for Christmas purchases.
Hey Sophie ! I use Klarna/ Klarna Credit Card really often because I like the idea of ordering and having to pay after I received my order, so I can check whether I got what I ordered with no flaws or not. Especially when I‘m ordering in multiple sizes so I don‘t have to wait a couple of weeks for my refund after returning ! For me it‘s really important to use Afterpay only If I can afford those items right now
This is exactly why I've loved Sophie's videos for years!! Absolutely brilliant job! As someone has been (and is now in manageable) debt, Klarna etc is not for me and doesn't make me feel comfortable. If you're great and strict at budgeting and know you've a few months with not too much money coming out then I can't blame splitting the payments up, but I'm personally avoiding it.
Agree but what if you loose your job as I did ? then boom lost my job got sick ,lost my mum died went into depression stopped paying collection agents ! It's evil
Couldn’t agree more with the credit card protection!! Every single purchase I make goes on my credit card & paid off in full each month. After working in insolvency I’ve seen too many situations where people do not get refunded and it always worries. Even part paying an item on a credit card gives you the full value protection too! It’s a no brainer
Sophie, I love how responsible you are to your audience! You are probably the only youtuber i know of who even gives credits to their subscribers with name and everything, so many others just say "some subscriber". Its really appreciated! Keep doing you. This was very educational, for me the part that hits the biggest with this is the "do i really need it" moment. I'm guilty of impulse purchases that i had doubths about after and I'm afraid how big they can become if i have the possibility to split the bill. All in all, i don't think luxury shopping is the best thing to put you in debt. What was said about the washer though makes a lot of sense.
I’m 20 and definitely still making my way up. I’ve used Afterpay to buy luxury as well as saving the full amount and I definitely see the points ur making. My problem with Afterpay is it definitely fuels my ‘I want it now’ mentality, made me get some things I regret in the long run
I’m from Brazil and literally there would not be a luxury market here at all if it wasn’t for payment plans... it’s so embedded in our consumption culture overall. All luxury brands split at least 6x interest free and can go up to 10x from a certain threshold. You don’t need to do anything excerpt swipe your card. The plans are directly granted by visa, master, etc. Whenever I traveled I was amazed that this was not the same for other countries.
@@ShweMyaukMyauk Not really fair to say that when these two governments are ran very differently, which is charge of the country's economy more than the individual citizens living their lives
Exactly. I’ve personally used afterpay, and have had no issues with it. I think if you’re responsible about it, it can be nice when you don’t feel comfortable with a large purchase upfront. However, I would advise that people make sure they can afford the payment arrangements, and that they really want the item. If you see something you like, give it some time before purchase. That way you can think clearly about it, and know you authentically want the product
Loved this topic and its good to see both sides of the coin here, I still haven't changed my stance but I'm glad to see that people are able to make it work for them and their lifestyle.
Hot topic! I actually used Afterpay & Paybright (I’m in Canada) and the just seemed like layaway to me (I believe it was 4 equal payments, no interest). I actually had the money, but I had budgeted it for savings. I saw 2 items with 2 different retailers that I had been eying for quite some time finally go on sale during Boxing week! I didn’t want to “interrupt” my budget so I just diverted the money I had reserved for my personal spending to making the payments, that way, I didn’t go into debt & I didn’t take away from my savings goals. Ultimately, I think as long as you use these programs for items you REALLY need or want & you budget fastidiously, you’ll be okay! With that being said, if you look at your forecasted budgets & you see there’s no room for such purchases or it will really put you on a tight squeeze, it’s best to stay away.
Your fashion and financial sense are on point as usual. I don’t think one should go into debt for luxe goods. Yes I purchase with a credit card for my protection, but I I’ve also saved up for it and once that bill comes I pay it off. Sometimes I’ll also pay part cash too. Something like those pay in part apps should be for those unexpected emergencies-like the dishwasher example. We are such a global consumer culture now (we Americans are pretty bad though I must say) but it’s interesting that this is a concern world wide. Thank you so much for starting this important convo in the luxe community. 💖 June
I have a friend who is unwell and on sickness benefit and she has found these 3 month systems really helpful when buying something essential for the house as she can't afford all at once and can't get credit as she's on benefits. She is sensible and ensures its all paid off in 3 months. For sensible use I'm sure they're great. I am just suspicious with these things though as I feel they can exploit vulnerable people who are not so sensible or impressionable by insta.
Love this topic. I think they've been pushing extra hard lately due to the economy being what it is at the moment. Great for when you need essential items but maybe not great to do it with interest if you're in debt already and don't need it.
This year I stopped purchasing items on credit. I have a baseline amount in savings, and am free to spend when there is extra. Honestly, I find that the purchases I make are better & more thought out. Not just for luxury, but even bits on Amazon! I personally spend the money I make much more differently than on credit xoxo
I'm someone that uses afterpay. I don't think my checkout totals have surpassed the $300 mark. I normally pay off my account before the scheduled times just to get it out of the way. When I first discovered afterpay, I thought it was pretty dangerous but I discovered that you're only allowed one purchase at a time. So if you were attempting to add another purchase on to your payment plan, you're unable to. I think that's pretty great and safe for potential shopaholics!
The are very few luxury goods that are so good where it is worth it. In my opinion, the euphoria of getting a luxury item is short lived and paying for an item months after you received it is painful.
Thanks for this approach Sophie. I feel like there are many creators who would jump at the chance for a sponsorship from a buy now pay later company & then just spruik their services. Thanks for being honest with their business model. Some of them have interest rates above 20% if you don't pay within the interest free period.
I LOVE afterpay. I really miss it at the moment (had to suspend my account because its a black mark here if your going for a house, but ill be re-opening it after thats all done). I've never had a late payment, i just really like the convenience of being able to spread my purchases out. I budget $50 per pay for spending, so thats my afterpay limit. Right now i really need new runners, i have the money in full in my account, but i just feel more secure if its in my account in case something happens.... even with a seperate emergency fund. I also really like it for buying multiple sizes online because by the time you return it, you either get refunded or just dont pay the last 2 installments. I understand how people get into trouble, by not managing their minimum payments, but its like being mad a bank gave you a credit card. You made the choice to open the account and spend the money. Its about being responsible. I do think more effort should be made in school to teach kids about money management. It would have been a lot more useful than a great deal of what i learnt in maths or science. Even if kids dont care, at least they will have the kowledge to draw on later. We did shares in my math class but not basic budgeting....
I’m glad you made this video. I am pretty responsible with my money but I found myself always doing Klarna and Afterpay and forgetting about it. Then my account got debited all the time for stuff I forgot I even purchased. Lol. It’s a slippery slope. And Klarna is terrible if you need to return. Customer service is only via chat. Not worth it.
I’ve actually used this a couple of times mainly for jewelry big ticket price items. The way to do it is buy in the middle if the month the klarna breaks payments into 4 payments interest free. And my credit statement pulls monthly therefore I pay my monthly credit card payments in full but yes always make sure you have the funds and that you can first afford it I would not recommend this to young people because I can see how you can fall into debt very fast. But if used properly in can be beneficial as it had been to me.
Fabulous and to the point as always! I agree with you Sophie. I think with these companies it’s easy to get sucked in and spend more than you can afford. Especially if you are a young adult. So please be careful people. Trust me you don’t want to owe money to anyone. It sucks big time!
Being from Sweden, I use Klarna every time I shop online, not just fashion, but even plants, medicine, technology etc. I don’t know if the option exists in the UK, but here we have a direct pay within 14 days of purchase. Basically, you pay with your card connected to Klarna, but they withdraw the money first two weeks later. It allows us to get the item, check it out and return it without ever paying. You just report the return of your purchase (one click in the app) and Klarna does it all for you. I couldn’t image paying any other way, especially for expensive things that I’m not sure I’ll keep. On the other hand, I never used any other function and can’t even imagine loaning money just to buy a thing that’s not necessity.
Lovely blazer Sophie. I agree Klarna and the like is recommended before other methods of payment. I think it's too tempting (for me personally) to use, because my brain goes "oh, well that massively takes the sting out of it, perhaps I can get this other thing I wanted too!" I had a bit of a splurge on the last 12 months and am paying student debt as well. Painful right now but it will be worth it. X x x
I have Klarna and also clear pay and they both offer similar things but both work in different ways, I’ve used clear pay for things and it splits your bill into 4 payments which you pay every 2 weeks and if you miss a payment you have to pay a late payment fee. Klarna on the other hand does offer buy now pay later and also split in 3 payments over 3 months. As someone who will admit that they had missed payments from Klarna they don’t charge for missed payments but there is also a button to extend the repayment. They do sometimes send out letters if the payment hasn’t been paid back in a while and it includes that it will affect your credit score and can involve debt collection. It is a risky situation to be in but it does appeal to younger people who don’t want to get a credit card. They can be very easy to use multiple times and then end up in a big pile of debt because you can’t pay it back at the same time
If you know you can pay it, I think its great, I’ve used it once and returned the item it was all automatic and very easy for me! People will get in debt regardless it’s all personal preference. Great video!
I do things the same way that you do. I pay with credit then pay it off in full at the end of the month before the interest is charged. It’s peace of mind, like you said, but also it’s my cash back rewards. It’s like I get a small discount on everything I buy :) However, I would never use Klarna or a similar service. I don’t need a purse that bad.
By the way you have helped me make smarter purchases!! It’s very refreshing to see a RUclipsr of your caliber not just go out and spend willy nilly like most of the others. Don’t get me wrong I buy a lot but I work very hard for it don’t put myself in debt or jeopardise my families finances by doing it!!!
Personally I use afterpay/Klarna/PayPal payments all the time, I ALWAYS pay on time with it directly taken out. But even when I do use it I have the money to pay it full at the time of purchase.
I’ve never used a buy now pay later but I have done something similar to what you were saying about the dishwasher, my refrigerator broke and I needed to replace it as I had roommates at the time, I didn’t have enough saved but I had a Home Depot credit card (I’m in thenUS) and they always have some deals if you buy something of a certain price you get 6 to 18 months interest free so I looked at how much I could pay and bought something I knew I would be able to pay off before the interest was due. More recently my husband did something similar, we’re expecting our first baby and we’ve been wanting to change the carpet to hardwood floors since we bought our house 2 years ago. He had enough saved but they gave him the option of 12 months interest free and he did that. He doesn’t do it often because we save up for things but he knew we’d probably have some unexpected bills due to the baby and even with health insurance we did have to pay a few thousand out of pocket already this year so it was a nice way for us to have a cushion and not dip into our savings, we paid the medical bills and still are able to pay the flooring but have the flooring now. I see when I purchase things online I’ll be asked if I want to split the bill, for such small amount I think it’s crazy. Maybe if there was something designer like a purse that I knew I would love and would be sold out but for $50? No. I’m like you, I like the protection of the credit card. I had to get my credit card company to reimburse me for something i purchased and was not what I ordered and the seller refused to refund. I had proof it was completely different so the credit card company sided with me, it took like 2 months but it was $1000 item that was worth maybe $250 and not what I originally ordered so I was thankful for the protection.
I dont like to buy anything on credit, even our cars haven't been bought on credit. I dont have a credit card, but when I did, I always payed it off every month. I would say if you do need to buy something on credit (and for me, that's need to have rather than nice to have), I'd stay away from companies like klarna. I'd always go through my bank, if they say "no", that's because there's a good reason! Glad to see that there seems to be a lot of sensible opinions out there!
I think on big ticket necessary items it's ok to split the cost over 3 months. But definitely not for luxury items or wants. It can become addictive and you can get into debt pretty quick. Young people if you can become financially literate it will change your life!
🤗🤩Sophie love the white outfit and this video is right on time because I was thinking about getting my tires through PayPal credit , 6 months interest free. So I’ll see what I decide in the next month. 🤔
I agree! I only use the options that are interest-free and only for things that I theoretically can use my money for but I don't want to + don't want to put the whole amount on my credit card. I work and have a steady income that splitting a $300 purchase into a few payments is just a way to stretch my money. But I wouldn't do it for anything over $500 or anything luxury.
I have zero problems put a bag on my Nordstrom’s or neiman marcus acct. I like the points and it’s great for your credit. I did use affirm once and payed it off early. It’s not that big a deal if your responsible. My daughter same as you paying them off every month before it was due
I think its a great idea for people who doesnt have the money right away for anything they want to buy. Whether its clothes, furniture or luxury. Its Interests free but dont be fool every 2 weeks comes fast so plan ahead and make sure the money is there by pay day.
I've just used Klarna for the second time in 18 months and I only use it for large purchases. I knew more than likely that half was going back, I had the money but refunds can take some time and this helps me keep money in my account longer. I didn't have any problem with the returns I made with my previous purchase either, Klarna were notified and I didn't have to do anything. But this could depend in the retailer. I do prefer to save up and buy, but I see it as a handy tool to be use on the rare occasion.
Facts luxury is what it means for the rich I provide a service ! For health I get low income clients looki g to get my service o tell them it's high end and maybe not in their budget ! Guess what they drain there bank come back looking for a discount ! And I explain the pit falls if they don't commit ! But will they listen NO! Now I've raised my prices and get income and affordability goals and long term commitment after they finish. Why because of they can't afford it they demand more fort here buck and complain far more ,becuse they begrudge paying in the first place , wealthy clients understand quality and if they earn £10;000 a week it's like dropping £10 on a bag . I was in that space you don't miss it it's like pocket change .don't do credit I use debit or cash that simple learned my lesson harshly
The reason why you couldn’t find out how Klarna makes money on their website is because the truth of it is quite unsavoury. They make money off of the people that default on their payments because those people are charged interest. Their whole business model relies on a certain percentage of people defaulting their payments. I personally believe in living within your means. What ever happened to saving up to buy something? These websites are teaching young people (my age) that they don’t need to save up for anything they can have everything right now. But at what cost?
I have not used it personally and I have never been in credit card debt in my life. However, I am considering it to buy a Chanel purse. I like it because I know I have the money in the bank but it's more digestible to me to split it up, particularly if there's other things I might have to pay for that's unexpected (car problems, doctor's appointments, etc). This way I'm not scrambling elsewhere to potentially pay for something I need!
Hi Sophie, just a point of clarification splitit is not new credit. People use their existing credit card, splitit just prolongs the payment. it generally has longer interest free period say 3-6 months. So if people are credit card users it can be useful for cashflow.
I have used Klarna many times now but I never use the payment plan and pay stuff off within the 30 days they give you after purchase. Definitely a safer way to buy for me because I'm mortally afraid of going into debt.
hi Sophie, this is a great topic. I can see how these would be useful in case of an emergency, such as when the washing machine breaks or something else in the household that is expensive and really necessary. I personally would use it only if I absolutely have to, and not for wants like handbags or expensive clothes. Unfortunately, I am afraid a lot of people will use these financing options mindlessly and will get themselves in big trouble... I don't like how it encourages mindless consumption
Hi Sophie, my comment is about the video itself: being a non-native english speaking, I found quite hard reading all the comments published in the video (the ones left by people who use klarna or similar services) WHILE you were talking. I had to read all the written parts and then come back to just hear what were you saying about it. So I suggest to you maybe next time to put these comments like the previous ones in the video (quick appearence and then commented by you or directly read by you). I think it's more easy for people like me who need some time to read and understand well all the comments 😊 Thank you ❤️❤️
I do have a monthly income but its not enough for klarna to let me pay on credit. Thats a good way of stopping people going into dept.. also stopping me from buying before thinking.
I use Klarna a lot now during covid as its handy to try on items at home and l return half the stuff and then only paying for the items I keep, so l find this great!👍🏻 As always you need disciplin to shop on credit but I do enjoy this service.😃
Great video! Like I said before I only use Klarna when I need to try multiple items and know I won’t be keeping it all! As well as this I would never buy anything using this service if I didn’t have the money to pay it back. Another point, in my view I wouldn’t like to use it for luxury purchases as to me I like to save up for these kinds of purchases as it brings a sense of pride when I am able to put my money towards something on my luxury wishlist! As a young person myself I’m always super cautious with my money but I do see how these companies influence some young people! I think with everything there are always pros and cons, it’d good to see all the different perspectives!
Personally i've never used any of these services but many of my friends use them for the returns aspect you mentioned. I prefer to outright buy items as i'm always worried i'll forget about the outgoing bill and spend what needs to be taken out, the only time I would consider using them is if something was vastly running out of stock and I don't quite have enough to purchase it currently.
I use them for bigger items so I can pay it over a couple of months so it’s spread out and not leave me with less money for the month. Defo interest free is great. Using this at Christmas was perfect as I had so many gifts then meant I had till February to pay it all back. I would recommend though make sure emails and notifications are on so you know when payment are due or if something happens to items it keep you updated
Like most things, I think it's extremely handy if used responsibly. I also think it's a sign of the times. 10-15 years ago, if u were @ University in the UK...if u were careful and had a job through-out ur course, Eg: In the Student Bar or a local Pizza Parlour...u could just about graduate debt-free | Nowadays, the University kids know that NO MATTER ;-) what they do, they'll be graduating WITH debt, it's just a question of how much | So being in debt is normal for them. They're much more comfortable with it. These companies recognise that...as well as the fact their target demographic probably find it harder 'today' obtaining Credit Cards due to being on furlough or not working at all - No jobs, Still living @ home so not a Home-Owner or Head of Household...and as such...these Companies are servicing this lucrative new gap / market opportunity.
I like free interest, but if you miss a payment month you may be charged interest for the missed pymt month. Also, for example, if it is 90-day no interest, etc the entire interest is backloaded so if you don't pay within the time period the entire interest is charged to you. So, I make sure to read the fine print and play the game to your advantage.
for my first luxe purchase (I bought my LV almost new from a reseller here in India), I took your advice and paid by credit card. it was also my first time using a credit card as I have always used debit which is more popular here. however, I made sure I was able to save upto 50% of the total cost before purchasing the bag. I immediately deposited the amount in my card so I could breathe easy until payday where the balance was paid off. .
I used and still use klarna. I like the rewards. Truth be told I have spent more than I needed to but I never spent above my means, If I really wanted to I could flat out buy every single item if I wanted to. I like this because I can space things out. What I do is pay the first two instalments on the day I buy the item and then my next pay I will pay the other two. I never actually wait the full time for any of these purchases. ( I don't like looming debt for no reason.)
I personnally used payment plan on 3x for luxury goods some times especially in second hand when you find THE piece and you don’t want to let it go but I rather prefer to save during 3 months and go purchase in the store ! Also I use klarna pay later for my clothes just because I really often need to send back things because they never suits Well or quality issues, like that I Don’t wait for refund. But, I have to admit that I often order more than what I need just because « I Don’t care I Don’t pay yet » anyway, it’s rare that I keep everything, always disapointed on my orders. So, yes that s cool but if you Don’t think twice you can fall in a kind of purchasing circle that’s not healthy at all, especially with all trends changing so quickly ! 😘
Interesting video, I’ve noticed how prominent these services are becoming, and have always been intrigued. I always clear my credit card each month, and have considered using one of these services, however I worry you’d be tempted to use it on lots of items, and hence the slippery slope!
Hello! I live in Sweden and I use Klarna all the time,mostly to secure a payment and my creditcard information instead of PayPal. Klarna does a control on your finances if you haven't used it for a long time, but I always get notice that they are checking my finances and why. I use it because I think it is better than to use my credit card on every site I buy from.
There are some benefits to paying on 0% installments, like additional points or promos from thr card company or merchant. I only ever avail of these installment plans when it's actually 0% interest (with no additional fees), which has been probably 3x in the 10+ years I've had credit cards. I like that my credit limit isn't at its full capacity since I pay off my debts in full every month, so (1) having some amount tied up helps me spend less and (2) that earmarked credit reminds me or recent purchases I made 😂 I never buy anything on installment which I can't pay for in full at that moment.
In UK we have a company from new Zealand called laybuy. I have checked it out. Very legit. How it works. Apply which is super easy they let you know immediate about a limit. Find a vendor that uses laybuy. Buy as normal but select laybuy. You pay no interest split into 6 weekly payments. Pay the first week at time of purchase they will send item at this stage. Laybuy pay them straight away then you now owe laybuy but you get the goods immediate.then pick your day you want the remaining 5 weekly payments taken out. Their is no interest or fees at any point. For many working class low paid this is super helpful. Need a new washing machine .. poor credit no options save up and buy when saved takes weeks. Or put it on laybuy and pay first week then pay of the remaining 5. Many get paid weekly in working class. So this can be a great help if used correctly in case of emergency. There is no interest at any stage just pay it up over 6 weeks.
We bought Peloton using Afirm (0% until it is paid off). I think it was like using their money . generally I won't buy anything with interest, but 0% and reasonable payment, why not.
Great video Sophie. I always pay by credit card and then pay off all my balance each month, but I did use Clearpay and Klarna a couple of times to try them out, and I was so stressed by the reminders they would send doing I would have to pay extra if I miss my payments that I just ended up paying both off immediately. I'll stick to my credit card from now on. Pay it, then forget about it! Xxx
I used afterpay as a try on service (but you gotta be on top of your errands for this to work) i usually buy more than one size, afterpay the order and return what I don't want or need within the 14 days (before the first payment is due). Its exactly as you said, means my money isn't tied up waiting for a return when really all i need is to see if it fits/i like it first.
My opinion on it is credit is credit and you have to be responsible with credit and pay it and only get what you know you can pay off every 2 weeks or monthly, it’s not rocket science some people like to try and keep up with wealthy celebrities/influencers buying pricey things they can’t afford on credit that they know their gonna have a hard time paying off or not paying off at all, yeah it’s interest free but if you don’t pay it’s going to collections and that’s gonna effect your credit and interest rates, so if your gonna do it only get what you can afford, I’ve used it once only bought what I could pay off now there’s a credit limit sitting waiting to be used well it’s gonna keep setting there cause I ain’t using it til I absolutely have too, once you get into some serious debt (not cause I was irresponsible with credit but I lost my job and was only paying minimum amount) so you learn from past mistakes and not do the same thing now I know better and do better with credit
Klarna Afterpay and the PayPal 4 pay installment plans are interest free and are over in 2 months. It’s really not a problem as long as you don’t get overwhelmed with too many of them.
It seems like a slippery slope to me. I can see a situation where to a younger person it would feel like "play money" and not take it seriously, until they had collected too much debt. In my early 20s I did exactly that with my new credit card. It ended up taking me years to pay it off.
These companies are similar to the in store credit cards but more advanced. Some friends of mine actually would have these in store credit cards thinking they were cheating the systems but they didn't see the bad credit happening. So unless one really keeps track of their finances, don't do it because one never wants to pay the minimum with a credit card. For small items, if you can't pay for three of them in one go then don't do. For big items, be strategic.
My body is a silly size and 90% of the clothes I buy do not fit, I am petite and very small but incredibly curvy, its a nightmare! I use (and have been using) Klarna for years now since my early 20s. It is a total life line to be able to try clothes on and see which ones fit, returning the ones that don’t, without any money coming out of my bank account! I have been trying to buy a sporty down jacket for 2 MONTHS now! Almost £300 down or rather floating around in the atmosphere while waiting on the refunds for the jackets which is just a nuisance for keeping track on my finances. Ultimately I always pay it in FULL no matter what and NEVER extend the period for payment. I typically have one Klarna order every few months normally around season changes when it calls for a wardrobe refresh. I do think ultimately though if you do not have the money upfront you should not be using apps like Klarna.
im 21, i've had afterpay here in australia since i was freshly 18. i ALWAYS had something on it every single fortnight, sometimes multiple orders. it got to the point that i was paying $400 a fortnight in repayments. afterpay isnt worth it, closing my account was and is the best thing i've ever done.
One thing I wont pay for without a credit card again is a holiday. I paid my holiday in cash and Corona hit and STA Travel went out of business and I didnt get anything back due to paying in cash. Lesson learnt.
I’ve used Affirm twice. But they don’t approve me for much. The most I got approved for was $1100 when I bought a pre loved Damier Ebene Louis Vuitton Alma from The Real Real. It was basically new in the box with its dust bag so it was a bargain.
It’s scary in a way. I have to admit now wirh social media my interest in luxury buying had increased significantly. Before I would want things but now it’s more like a small obsession. Luckily I’m smart enough to know better because of my shopping experiences and credit card debt from my 20s. It’s very tempting because it allows us to buy thing that in reality we don’t need and can’t afford. I understand using it for items such as appliances we might need or something of the sort. But would never use it on a vintage Chanel bag. Saying that because I was tempted to last week actually.
I like to use afterpay and Paypal its pay in 4 every two weeks. I used it for a lot of things for about a year now. Although i agree with you. This sometimes makes me do impulse purchases, that i do regret, especially from the companies that are foreign and have very tricky and short period to return, that i dont want even bother with, but overall i am happy with it. Although i am checking constantly how much i still have to repay them, and looking to slowdown and make more thought through and not impulsive purchases . Blessings🙏💕
I actually just did this for the first time, even though I could afford to purchase it outright. Waiting for my order to arrive today from Fashionphile. I only did it because it was interest free, and I don't like pulling out that much money out of my savings at one time, so why not? Also, I'm 44 and financially responsible, but if this were available when I was in my 20's and irresponsible, I would have gotten in trouble! Thank you for addressing this!
I would only pay with credit cards out of convenience in the store or because of shopper protection. My debit card has a safety limit on it, so depending on what I'm spending, I'd have to get cash from the bank. BUT credit card only if I can pay it off immediately.
I have been in debt for years. For the first time in years come this May, I will be debt free. It's been so hard for last 1.5 yrs, but I am so proud
Congratulations!!!
Well done, especially during these difficult times, you’ve every right to feel proud ❤️❤️
You should be very proud! Very well done!
GO girl Debt is their goal itkeeps you in chains I'm working off mine now too massive debt chains thats how the rich get rich
Way to go. What a weight lifted 🙌🏽🙌🏽
I’m 21 and have never been in debt. I just save the full amount for the bags I want to buy
Smart!
Have you ever purchased your own car without a co-signer? I would think it would be a good idea to start a credit history with something not so expensive in order to purchase a car in the future.
Unless it’s a car or house, keep this attitude up.
@@mrvgstyle2442 I have a credit card. I just use it to pay for things and then pay it off right away.
@@Izzy-hr3cw yes!!! 👏 I love hearing the younger generation being smart with their money 💰 keep it up. Debt is a huge trap that’s incredibly hard to get out of.
I think when it comes to luxury it shouldn’t be like this, in my opinion if you can afford it don’t have it, it’s not worth the debt people can get into for a pair of Louboutins.
they use gambling science to get people addicted, even rounded shapes on the buttons to seem more friendly! note the child-like, less threatening use of pastels?
@@seabreeze4559 wow!
@@seabreeze4559 I got the same impression. I'm 22 and It feels very manipulative for a finance firm to show themself like this. All pink and cute.
@@sanamhusain691 Gross. Is it just me or is it no longer middle class 1800's England where the belief of "the Great Unwashed" is still a thing 🙄 It's 2021, stop with the stereotypes and assumptions about the poor and their life situation. You're most likely part of the 99% yourself.
@@222o-u3t no I am not lol, I do not have children and will not have children I cannot afford.
Gorgeous blazer Sophie! :) Thank you for addressing this subject after my comment! I‘m 25yrs old, just got my master degree and I do have to agree: As a young person it‘s so tempting to use something like Klarna, cause the way it‘s advertised seems so easy. The design is simple and appealing to a younger audience without actually talking about the possible dangers of debt. It makes it look like designer items have to be something essential in this "flexing culture“ without actually thinking about the purpose of luxury.
Hey Alexander!! 🙌🏽🙌🏽🙌🏽🙌🏽 I’m really pleased to see your name here and that you saw the vid - thank you for such an interesting video request. You really got me thinking on this one! Yes, I too thought that the visual aspect of Klarna and the marketing (it being pink and very millennial looking!) Doesnt make it feel like you’re actually getting into a debt. I think though that for all those who suffer from it, there will be those whom it teaches budgeting, repayments and debt management to. I do t know, Just a thought! ☺️ Hugs xxx
I don’t feel the same “shopping high” when paying in instalments, to me being able to pay for it outright is part of the enjoyable experience. (Still using a credit card for the points tho)
Great topic!💖
I know what you mean Martha!! Plus, I think the payments after the initial excitement has worn-off must be annoying xxx
I agree. I pay with credit card because I accumulate points and perks. However when the bill comes and I am able to pay it off in full I feel really good
I think if the payment plan is short and interest free, then it’s ok.
I agree!
Agreed! These are way better than cc. You have no choice but to pay it back within a certain time period. With cc most ppl tend to end up dragging the payments out...compiling interest.
I AGREE!! Nothing wrong with payment plan as long as we are able to pay it back on time!!!!
The problem is some people get sucked into it and it’s a slippery slope
@@ShweMyaukMyauk oof. That’s *their* problem, but it works out for me!
I only have 2 debts: student loan and home mortgage. I don't own a credit card and I only buy what I can afford.
I used debit for years to ensure I spent and saved well but I now have a discover. I get cash back they match at the end of the year. I am sure there are other options but I haven’t changed my lifestyle, have automatic payments of the full amount, and have earned almost $40 so $80 total. Pretty cool!
Smart
Hi friends! Thanks to all of you who responded to my post on here the other day, and shared with me your point of view on Buy Now, Pay Later services!
Ive looked into these payment services a lot over the weekend and my verdict is that I think these services (where you pay-off an item within 3 months, interest free) are probably handy and a good thing if you plan on buying one big thing and paying it off within those 3mnths.
But I feel strongly, they’re only good if you use them responsibly.... I worry about people getting sucked-in and into debt.
But if you’re using it responsibly, in theory it lets you keep capital in your bank for as long as possible, and it can allow you to purchase something in more manageable payments.
I can also see it being useful for if you buy and return lots of items, without waiting for refunds.
I personally wouldn’t use it for luxury, but I might consider it for furniture etc. BUT, I don’t think using it for luxury is a bad thing if it’s what you want to do, and if the monthly payments aren’t going to be difficult to you.
What do you think?xx
I think these spilt payment things are a bad idea. If you can’t afford it before a split payment maybe you shouldn’t be buying it. Sorry harsh but it’s logical. I was just taught to buy what you can afford.
I can speak to this with my personal experience. About 15 years ago, I got myself into a TON of debt which was a huge mistake. I now only purchase items that I can pay for in full. It was hard going thru that but it was a GREAT life lesson.
I’m with you Sophie!
Agreed I only use it in the 3 month no apr pay off.
Agreed. Only good if you use it responsibly. As long as you pay within the terms where there is no interest.
I used Klarna a number of times, never had any problems and I like that my funds are not held for a long time during returns especially during lockdown now that we are forced to shop online. For me also the best thing about Klarna is that when I shop in stores I never used before, I don’t have to leave my card details with all these different companies that I might only use once. If Klarna messes up, at least I’ll know whose responsible.
Delighted you’re addressing this, I know for a lot of people it’s so handy but the way it gets pushed on like university age is concerning. It reminds me a little of you saying about the banks with their uni stalls & the free gifts. Keep up with the topical videos, I thoroughly enjoy them ❤️
Great to see your name here my friend!! I totally agree with you, I think these banks and institutions pray on younger people reaching that age of wanting things that are out of reach.
Ahh, you’ve just reminded me of the banks at my uni on the first day of joining. “Free crayons and a teddy bear if you sign-up to our £2k overdraft” 🤣🤣🤣🤣madness how they can do that, if my parents were there it wouldn’t have happened! Hugs to you xx
@@SophieShohetOfficial Thanks for replying, I remember when you first said that it sounded it insane but I remember we had in my uni days too (early 2010s) but maybe the freebies more built around other financial products (I vaguely remember something with phone insurance or something like that, still something young adults would want but less on the nose). I am doing good, speaking problems with returns etc, I’ve been trying to get a refund and buy the same pair of shoes since January. It’s a saga, so I defo can see using these services to avoid these situations.
Sophie your content just keeps getting better and better!
I agree
I use it for items I will have to wait for. For example, we recently redecorated our living room and wanted a new ottoman to replace our coffee table. It was going to take 10-12 weeks to arrive because they are made to order with the company we were purchasing from. I knew we would have to save for 2 months to afford it and then, adding on the construction time, it meant we would be getting it 5months later. Therefor it made sense to split the payment over 3 months interest free. Pay while you wait. However I can see it easily spiralling out of control. You split a payment with asos because you don't want to pay £100 in one chunk. Then you do the same on cult beauty and Topshop etc. Before you know it your split payments exceed the amount you had originally baulked at paying and now you are committed to that for the next 3 months.
i use afterpay but i only use it for small items, max 300. I dont want to pay more than that in the next 3 months
under the old lay-by system in my mother's day the store would put away the item and you'd pay for it and THEN get it when fully paid off. That way you had the discipline of saving and you knew you were getting the item and no interest rates or penalties to pay for and then the reward of getting the item. But then stores got sick of being left with unpaid for items which they'd have to return to stock, and it was expensive for them to administer.
But it was far better for the customers. My mother used it for Christmas purchases.
Hey Sophie ! I use Klarna/ Klarna Credit Card really often because I like the idea of ordering and having to pay after I received my order, so I can check whether I got what I ordered with no flaws or not. Especially when I‘m ordering in multiple sizes so I don‘t have to wait a couple of weeks for my refund after returning ! For me it‘s really important to use Afterpay only If I can afford those items right now
This is exactly why I've loved Sophie's videos for years!! Absolutely brilliant job! As someone has been (and is now in manageable) debt, Klarna etc is not for me and doesn't make me feel comfortable. If you're great and strict at budgeting and know you've a few months with not too much money coming out then I can't blame splitting the payments up, but I'm personally avoiding it.
I think it’s a great idea but not for people who are bad at managing finances. Like you said Sophie, easy debt ...
Agree but what if you loose your job as I did ? then boom lost my job got sick ,lost my mum died went into depression stopped paying collection agents ! It's evil
Blazer is epic. Slightly different but wearable. Do keep it.
Couldn’t agree more with the credit card protection!! Every single purchase I make goes on my credit card & paid off in full each month. After working in insolvency I’ve seen too many situations where people do not get refunded and it always worries. Even part paying an item on a credit card gives you the full value protection too! It’s a no brainer
Sophie, I love how responsible you are to your audience! You are probably the only youtuber i know of who even gives credits to their subscribers with name and everything, so many others just say "some subscriber". Its really appreciated! Keep doing you.
This was very educational, for me the part that hits the biggest with this is the "do i really need it" moment. I'm guilty of impulse purchases that i had doubths about after and I'm afraid how big they can become if i have the possibility to split the bill. All in all, i don't think luxury shopping is the best thing to put you in debt. What was said about the washer though makes a lot of sense.
I’m 20 and definitely still making my way up. I’ve used Afterpay to buy luxury as well as saving the full amount and I definitely see the points ur making. My problem with Afterpay is it definitely fuels my ‘I want it now’ mentality, made me get some things I regret in the long run
I’m from Brazil and literally there would not be a luxury market here at all if it wasn’t for payment plans... it’s so embedded in our consumption culture overall. All luxury brands split at least 6x interest free and can go up to 10x from a certain threshold. You don’t need to do anything excerpt swipe your card. The plans are directly granted by visa, master, etc. Whenever I traveled I was amazed that this was not the same for other countries.
In Germany it is even frowned upon using credit card. Compare both countries economy and you get your answer
@@ShweMyaukMyauk the ironic part of this comment is that I’m an executive working in Brazil for a huge German company.
@@ShweMyaukMyauk Not really fair to say that when these two governments are ran very differently, which is charge of the country's economy more than the individual citizens living their lives
Here in the US , people can’t afford half the stuff they have. It’s all in credit.
Wow. That's an eye opener.
I don't think buying things on credit is bug here in the UK. I could be wrong, but I don't get that vibe here.
Exactly.
I’ve personally used afterpay, and have had no issues with it. I think if you’re responsible about it, it can be nice when you don’t feel comfortable with a large purchase upfront. However, I would advise that people make sure they can afford the payment arrangements, and that they really want the item.
If you see something you like, give it some time before purchase. That way you can think clearly about it, and know you authentically want the product
Loved this topic and its good to see both sides of the coin here, I still haven't changed my stance but I'm glad to see that people are able to make it work for them and their lifestyle.
Hot topic! I actually used Afterpay & Paybright (I’m in Canada) and the just seemed like layaway to me (I believe it was 4 equal payments, no interest). I actually had the money, but I had budgeted it for savings. I saw 2 items with 2 different retailers that I had been eying for quite some time finally go on sale during Boxing week! I didn’t want to “interrupt” my budget so I just diverted the money I had reserved for my personal spending to making the payments, that way, I didn’t go into debt & I didn’t take away from my savings goals. Ultimately, I think as long as you use these programs for items you REALLY need or want & you budget fastidiously, you’ll be okay! With that being said, if you look at your forecasted budgets & you see there’s no room for such purchases or it will really put you on a tight squeeze, it’s best to stay away.
Your fashion and financial sense are on point as usual. I don’t think one should go into debt for luxe goods. Yes I purchase with a credit card for my protection, but I I’ve also saved up for it and once that bill comes I pay it off. Sometimes I’ll also pay part cash too. Something like those pay in part apps should be for those unexpected emergencies-like the dishwasher example. We are such a global consumer culture now (we Americans are pretty bad though I must say) but it’s interesting that this is a concern world wide. Thank you so much for starting this important convo in the luxe community. 💖 June
I have a friend who is unwell and on sickness benefit and she has found these 3 month systems really helpful when buying something essential for the house as she can't afford all at once and can't get credit as she's on benefits. She is sensible and ensures its all paid off in 3 months.
For sensible use I'm sure they're great. I am just suspicious with these things though as I feel they can exploit vulnerable people who are not so sensible or impressionable by insta.
Love that you always have a new angle and new info on lux goods.
Love this topic. I think they've been pushing extra hard lately due to the economy being what it is at the moment. Great for when you need essential items but maybe not great to do it with interest if you're in debt already and don't need it.
This year I stopped purchasing items on credit. I have a baseline amount in savings, and am free to spend when there is extra. Honestly, I find that the purchases I make are better & more thought out. Not just for luxury, but even bits on Amazon! I personally spend the money I make much more differently than on credit xoxo
I'm someone that uses afterpay. I don't think my checkout totals have surpassed the $300 mark. I normally pay off my account before the scheduled times just to get it out of the way. When I first discovered afterpay, I thought it was pretty dangerous but I discovered that you're only allowed one purchase at a time. So if you were attempting to add another purchase on to your payment plan, you're unable to. I think that's pretty great and safe for potential shopaholics!
The are very few luxury goods that are so good where it is worth it. In my opinion, the euphoria of getting a luxury item is short lived and paying for an item months after you received it is painful.
Thanks for this approach Sophie. I feel like there are many creators who would jump at the chance for a sponsorship from a buy now pay later company & then just spruik their services. Thanks for being honest with their business model. Some of them have interest rates above 20% if you don't pay within the interest free period.
I LOVE afterpay. I really miss it at the moment (had to suspend my account because its a black mark here if your going for a house, but ill be re-opening it after thats all done). I've never had a late payment, i just really like the convenience of being able to spread my purchases out. I budget $50 per pay for spending, so thats my afterpay limit. Right now i really need new runners, i have the money in full in my account, but i just feel more secure if its in my account in case something happens.... even with a seperate emergency fund. I also really like it for buying multiple sizes online because by the time you return it, you either get refunded or just dont pay the last 2 installments.
I understand how people get into trouble, by not managing their minimum payments, but its like being mad a bank gave you a credit card. You made the choice to open the account and spend the money. Its about being responsible. I do think more effort should be made in school to teach kids about money management. It would have been a lot more useful than a great deal of what i learnt in maths or science. Even if kids dont care, at least they will have the kowledge to draw on later. We did shares in my math class but not basic budgeting....
I’m glad you made this video. I am pretty responsible with my money but I found myself always doing Klarna and Afterpay and forgetting about it. Then my account got debited all the time for stuff I forgot I even purchased. Lol. It’s a slippery slope. And Klarna is terrible if you need to return. Customer service is only via chat. Not worth it.
I’ve actually used this a couple of times mainly for jewelry big ticket price items. The way to do it is buy in the middle if the month the klarna breaks payments into 4 payments interest free. And my credit statement pulls monthly therefore I pay my monthly credit card payments in full but yes always make sure you have the funds and that you can first afford it I would not recommend this to young people because I can see how you can fall into debt very fast. But if used properly in can be beneficial as it had been to me.
Fabulous and to the point as always! I agree with you Sophie. I think with these companies it’s easy to get sucked in and spend more than you can afford. Especially if you are a young adult. So please be careful people. Trust me you don’t want to owe money to anyone. It sucks big time!
Being from Sweden, I use Klarna every time I shop online, not just fashion, but even plants, medicine, technology etc.
I don’t know if the option exists in the UK, but here we have a direct pay within 14 days of purchase. Basically, you pay with your card connected to Klarna, but they withdraw the money first two weeks later. It allows us to get the item, check it out and return it without ever paying. You just report the return of your purchase (one click in the app) and Klarna does it all for you. I couldn’t image paying any other way, especially for expensive things that I’m not sure I’ll keep.
On the other hand, I never used any other function and can’t even imagine loaning money just to buy a thing that’s not necessity.
Lovely blazer Sophie.
I agree Klarna and the like is recommended before other methods of payment.
I think it's too tempting (for me personally) to use, because my brain goes "oh, well that massively takes the sting out of it, perhaps I can get this other thing I wanted too!"
I had a bit of a splurge on the last 12 months and am paying student debt as well. Painful right now but it will be worth it.
X x x
I have Klarna and also clear pay and they both offer similar things but both work in different ways, I’ve used clear pay for things and it splits your bill into 4 payments which you pay every 2 weeks and if you miss a payment you have to pay a late payment fee. Klarna on the other hand does offer buy now pay later and also split in 3 payments over 3 months. As someone who will admit that they had missed payments from Klarna they don’t charge for missed payments but there is also a button to extend the repayment. They do sometimes send out letters if the payment hasn’t been paid back in a while and it includes that it will affect your credit score and can involve debt collection. It is a risky situation to be in but it does appeal to younger people who don’t want to get a credit card. They can be very easy to use multiple times and then end up in a big pile of debt because you can’t pay it back at the same time
If you know you can pay it, I think its great, I’ve used it once and returned the item it was all automatic and very easy for me! People will get in debt regardless it’s all personal preference. Great video!
I do things the same way that you do. I pay with credit then pay it off in full at the end of the month before the interest is charged. It’s peace of mind, like you said, but also it’s my cash back rewards. It’s like I get a small discount on everything I buy :) However, I would never use Klarna or a similar service. I don’t need a purse that bad.
By the way you have helped me make smarter purchases!! It’s very refreshing to see a RUclipsr of your caliber not just go out and spend willy nilly like most of the others. Don’t get me wrong I buy a lot but I work very hard for it don’t put myself in debt or jeopardise my families finances by doing it!!!
Personally I use afterpay/Klarna/PayPal payments all the time, I ALWAYS pay on time with it directly taken out. But even when I do use it I have the money to pay it full at the time of purchase.
I’ve never used a buy now pay later but I have done something similar to what you were saying about the dishwasher, my refrigerator broke and I needed to replace it as I had roommates at the time, I didn’t have enough saved but I had a Home Depot credit card (I’m in thenUS) and they always have some deals if you buy something of a certain price you get 6 to 18 months interest free so I looked at how much I could pay and bought something I knew I would be able to pay off before the interest was due. More recently my husband did something similar, we’re expecting our first baby and we’ve been wanting to change the carpet to hardwood floors since we bought our house 2 years ago. He had enough saved but they gave him the option of 12 months interest free and he did that. He doesn’t do it often because we save up for things but he knew we’d probably have some unexpected bills due to the baby and even with health insurance we did have to pay a few thousand out of pocket already this year so it was a nice way for us to have a cushion and not dip into our savings, we paid the medical bills and still are able to pay the flooring but have the flooring now. I see when I purchase things online I’ll be asked if I want to split the bill, for such small amount I think it’s crazy. Maybe if there was something designer like a purse that I knew I would love and would be sold out but for $50? No. I’m like you, I like the protection of the credit card. I had to get my credit card company to reimburse me for something i purchased and was not what I ordered and the seller refused to refund. I had proof it was completely different so the credit card company sided with me, it took like 2 months but it was $1000 item that was worth maybe $250 and not what I originally ordered so I was thankful for the protection.
I dont like to buy anything on credit, even our cars haven't been bought on credit. I dont have a credit card, but when I did, I always payed it off every month. I would say if you do need to buy something on credit (and for me, that's need to have rather than nice to have), I'd stay away from companies like klarna. I'd always go through my bank, if they say "no", that's because there's a good reason! Glad to see that there seems to be a lot of sensible opinions out there!
I think on big ticket necessary items it's ok to split the cost over 3 months. But definitely not for luxury items or wants.
It can become addictive and you can get into debt pretty quick. Young people if you can become financially literate it will change your life!
🤗🤩Sophie love the white outfit and this video is right on time because I was thinking about getting my tires through PayPal credit , 6 months interest free. So I’ll see what I decide in the next month. 🤔
I agree! I only use the options that are interest-free and only for things that I theoretically can use my money for but I don't want to + don't want to put the whole amount on my credit card. I work and have a steady income that splitting a $300 purchase into a few payments is just a way to stretch my money. But I wouldn't do it for anything over $500 or anything luxury.
I have zero problems put a bag on my Nordstrom’s or neiman marcus acct. I like the points and it’s great for your credit. I did use affirm once and payed it off early. It’s not that big a deal if your responsible. My daughter same as you paying them off every month before it was due
Buying in installments is VERY common in Brazil! Up to 48 installments (interest included, of course)!
I think its a great idea for people who doesnt have the money right away for anything they want to buy. Whether its clothes, furniture or luxury. Its Interests free but dont be fool every 2 weeks comes fast so plan ahead and make sure the money is there by pay day.
I've just used Klarna for the second time in 18 months and I only use it for large purchases. I knew more than likely that half was going back, I had the money but refunds can take some time and this helps me keep money in my account longer. I didn't have any problem with the returns I made with my previous purchase either, Klarna were notified and I didn't have to do anything. But this could depend in the retailer. I do prefer to save up and buy, but I see it as a handy tool to be use on the rare occasion.
If you have to save to pay for or pay via installments for luxury goods, you can't afford them.
Facts luxury is what it means for the rich I provide a service ! For health I get low income clients looki g to get my service o tell them it's high end and maybe not in their budget ! Guess what they drain there bank come back looking for a discount ! And I explain the pit falls if they don't commit ! But will they listen NO! Now I've raised my prices and get income and affordability goals and long term commitment after they finish. Why because of they can't afford it they demand more fort here buck and complain far more ,becuse they begrudge paying in the first place , wealthy clients understand quality and if they earn £10;000 a week it's like dropping £10 on a bag . I was in that space you don't miss it it's like pocket change .don't do credit I use debit or cash that simple learned my lesson harshly
The reason why you couldn’t find out how Klarna makes money on their website is because the truth of it is quite unsavoury. They make money off of the people that default on their payments because those people are charged interest. Their whole business model relies on a certain percentage of people defaulting their payments.
I personally believe in living within your means. What ever happened to saving up to buy something? These websites are teaching young people (my age) that they don’t need to save up for anything they can have everything right now. But at what cost?
I only do it if I can afford to pay it back and it’s helped me buy lots of luxury but I’ve never been in debt 😊
I love klarna and affirm, I try to have at least half the price and then just pay it off early.
I have not used it personally and I have never been in credit card debt in my life. However, I am considering it to buy a Chanel purse. I like it because I know I have the money in the bank but it's more digestible to me to split it up, particularly if there's other things I might have to pay for that's unexpected (car problems, doctor's appointments, etc). This way I'm not scrambling elsewhere to potentially pay for something I need!
Hi Sophie, just a point of clarification splitit is not new credit. People use their existing credit card, splitit just prolongs the payment. it generally has longer interest free period say 3-6 months. So if people are credit card users it can be useful for cashflow.
I have used Klarna many times now but I never use the payment plan and pay stuff off within the 30 days they give you after purchase.
Definitely a safer way to buy for me because I'm mortally afraid of going into debt.
hi Sophie, this is a great topic. I can see how these would be useful in case of an emergency, such as when the washing machine breaks or something else in the household that is expensive and really necessary. I personally would use it only if I absolutely have to, and not for wants like handbags or expensive clothes. Unfortunately, I am afraid a lot of people will use these financing options mindlessly and will get themselves in big trouble... I don't like how it encourages mindless consumption
Hi Sophie, my comment is about the video itself: being a non-native english speaking, I found quite hard reading all the comments published in the video (the ones left by people who use klarna or similar services) WHILE you were talking. I had to read all the written parts and then come back to just hear what were you saying about it. So I suggest to you maybe next time to put these comments like the previous ones in the video (quick appearence and then commented by you or directly read by you). I think it's more easy for people like me who need some time to read and understand well all the comments 😊 Thank you ❤️❤️
Another awesome topic. I save & then buy! Thanks for sharing. Love your blazer looks stunning on you.
I do have a monthly income but its not enough for klarna to let me pay on credit. Thats a good way of stopping people going into dept.. also stopping me from buying before thinking.
I use Klarna a lot now during covid as its handy to try on items at home and l return half the stuff and then only paying for the items I keep, so l find this great!👍🏻 As always you need disciplin to shop on credit but I do enjoy this service.😃
Great video! Like I said before I only use Klarna when I need to try multiple items and know I won’t be keeping it all! As well as this I would never buy anything using this service if I didn’t have the money to pay it back. Another point, in my view I wouldn’t like to use it for luxury purchases as to me I like to save up for these kinds of purchases as it brings a sense of pride when I am able to put my money towards something on my luxury wishlist! As a young person myself I’m always super cautious with my money but I do see how these companies influence some young people! I think with everything there are always pros and cons, it’d good to see all the different perspectives!
Personally i've never used any of these services but many of my friends use them for the returns aspect you mentioned. I prefer to outright buy items as i'm always worried i'll forget about the outgoing bill and spend what needs to be taken out, the only time I would consider using them is if something was vastly running out of stock and I don't quite have enough to purchase it currently.
I use them for bigger items so I can pay it over a couple of months so it’s spread out and not leave me with less money for the month. Defo interest free is great. Using this at Christmas was perfect as I had so many gifts then meant I had till February to pay it all back. I would recommend though make sure emails and notifications are on so you know when payment are due or if something happens to items it keep you updated
Like most things, I think it's extremely handy if used responsibly. I also think it's a sign of the times. 10-15 years ago, if u were @ University in the UK...if u were careful and had a job through-out ur course, Eg: In the Student Bar or a local Pizza Parlour...u could just about graduate debt-free | Nowadays, the University kids know that NO MATTER ;-) what they do, they'll be graduating WITH debt, it's just a question of how much | So being in debt is normal for them. They're much more comfortable with it. These companies recognise that...as well as the fact their target demographic probably find it harder 'today' obtaining Credit Cards due to being on furlough or not working at all - No jobs, Still living @ home so not a Home-Owner or Head of Household...and as such...these Companies are servicing this lucrative new gap / market opportunity.
I like free interest, but if you miss a payment month you may be charged interest for the missed pymt month. Also, for example, if it is 90-day no interest, etc the entire interest is backloaded so if you don't pay within the time period the entire interest is charged to you. So, I make sure to read the fine print and play the game to your advantage.
for my first luxe purchase (I bought my LV almost new from a reseller here in India), I took your advice and paid by credit card. it was also my first time using a credit card as I have always used debit which is more popular here. however, I made sure I was able to save upto 50% of the total cost before purchasing the bag. I immediately deposited the amount in my card so I could breathe easy until payday where the balance was paid off. .
I used and still use klarna. I like the rewards. Truth be told I have spent more than I needed to but I never spent above my means, If I really wanted to I could flat out buy every single item if I wanted to. I like this because I can space things out. What I do is pay the first two instalments on the day I buy the item and then my next pay I will pay the other two. I never actually wait the full time for any of these purchases. ( I don't like looming debt for no reason.)
I personnally used payment plan on 3x for luxury goods some times especially in second hand when you find THE piece and you don’t want to let it go but I rather prefer to save during 3 months and go purchase in the store !
Also I use klarna pay later for my clothes just because I really often need to send back things because they never suits Well or quality issues, like that I Don’t wait for refund.
But, I have to admit that I often order more than what I need just because « I Don’t care I Don’t pay yet » anyway, it’s rare that I keep everything, always disapointed on my orders.
So, yes that s cool but if you Don’t think twice you can fall in a kind of purchasing circle that’s not healthy at all, especially with all trends changing so quickly ! 😘
Interesting video, I’ve noticed how prominent these services are becoming, and have always been intrigued. I always clear my credit card each month, and have considered using one of these services, however I worry you’d be tempted to use it on lots of items, and hence the slippery slope!
Hello! I live in Sweden and I use Klarna all the time,mostly to secure a payment and my creditcard information instead of PayPal. Klarna does a control on your finances if you haven't used it for a long time, but I always get notice that they are checking my finances and why. I use it because I think it is better than to use my credit card on every site I buy from.
There are some benefits to paying on 0% installments, like additional points or promos from thr card company or merchant. I only ever avail of these installment plans when it's actually 0% interest (with no additional fees), which has been probably 3x in the 10+ years I've had credit cards. I like that my credit limit isn't at its full capacity since I pay off my debts in full every month, so (1) having some amount tied up helps me spend less and (2) that earmarked credit reminds me or recent purchases I made 😂 I never buy anything on installment which I can't pay for in full at that moment.
I love that blazer 😍 and the video of course! Thank you for putting so much effort into your videos and educating us 😊
This is really valuable content and I love you listed both pros and cons 🙌🏻 Thank you Sophie for your amazing videos ❤️
That blazer.....yessssss!
In UK we have a company from new Zealand called laybuy. I have checked it out. Very legit. How it works. Apply which is super easy they let you know immediate about a limit. Find a vendor that uses laybuy. Buy as normal but select laybuy. You pay no interest split into 6 weekly payments. Pay the first week at time of purchase they will send item at this stage. Laybuy pay them straight away then you now owe laybuy but you get the goods immediate.then pick your day you want the remaining 5 weekly payments taken out. Their is no interest or fees at any point. For many working class low paid this is super helpful. Need a new washing machine .. poor credit no options save up and buy when saved takes weeks. Or put it on laybuy and pay first week then pay of the remaining 5. Many get paid weekly in working class. So this can be a great help if used correctly in case of emergency. There is no interest at any stage just pay it up over 6 weeks.
We bought Peloton using Afirm (0% until it is paid off). I think it was like using their money . generally I won't buy anything with interest, but 0% and reasonable payment, why not.
Great video Sophie. I always pay by credit card and then pay off all my balance each month, but I did use Clearpay and Klarna a couple of times to try them out, and I was so stressed by the reminders they would send doing I would have to pay extra if I miss my payments that I just ended up paying both off immediately. I'll stick to my credit card from now on. Pay it, then forget about it! Xxx
Thank you so much for watching and for sharing your thoughts on this topic! Hugs xx😘😘
I used afterpay as a try on service (but you gotta be on top of your errands for this to work) i usually buy more than one size, afterpay the order and return what I don't want or need within the 14 days (before the first payment is due). Its exactly as you said, means my money isn't tied up waiting for a return when really all i need is to see if it fits/i like it first.
My opinion on it is credit is credit and you have to be responsible with credit and pay it and only get what you know you can pay off every 2 weeks or monthly, it’s not rocket science some people like to try and keep up with wealthy celebrities/influencers buying pricey things they can’t afford on credit that they know their gonna have a hard time paying off or not paying off at all, yeah it’s interest free but if you don’t pay it’s going to collections and that’s gonna effect your credit and interest rates, so if your gonna do it only get what you can afford, I’ve used it once only bought what I could pay off now there’s a credit limit sitting waiting to be used well it’s gonna keep setting there cause I ain’t using it til I absolutely have too, once you get into some serious debt (not cause I was irresponsible with credit but I lost my job and was only paying minimum amount) so you learn from past mistakes and not do the same thing now I know better and do better with credit
Does Chanel have this option? 👀
Klarna Afterpay and the PayPal 4 pay installment plans are interest free and are over in 2 months. It’s really not a problem as long as you don’t get overwhelmed with too many of them.
Thank you so much for watching and for sharing your thoughts on this topic! Hugs xx😘😘
Great video 🌸🌸 it’s good to have a balanced view and look at pros and cons.
It seems like a slippery slope to me. I can see a situation where to a younger person it would feel like "play money" and not take it seriously, until they had collected too much debt. In my early 20s I did exactly that with my new credit card. It ended up taking me years to pay it off.
These companies are similar to the in store credit cards but more advanced. Some friends of mine actually would have these in store credit cards thinking they were cheating the systems but they didn't see the bad credit happening. So unless one really keeps track of their finances, don't do it because one never wants to pay the minimum with a credit card. For small items, if you can't pay for three of them in one go then don't do. For big items, be strategic.
That blazer is fire!
My body is a silly size and 90% of the clothes I buy do not fit, I am petite and very small but incredibly curvy, its a nightmare! I use (and have been using) Klarna for years now since my early 20s. It is a total life line to be able to try clothes on and see which ones fit, returning the ones that don’t, without any money coming out of my bank account!
I have been trying to buy a sporty down jacket for 2 MONTHS now! Almost £300 down or rather floating around in the atmosphere while waiting on the refunds for the jackets which is just a nuisance for keeping track on my finances.
Ultimately I always pay it in FULL no matter what and NEVER extend the period for payment. I typically have one Klarna order every few months normally around season changes when it calls for a wardrobe refresh.
I do think ultimately though if you do not have the money upfront you should not be using apps like Klarna.
im 21, i've had afterpay here in australia since i was freshly 18. i ALWAYS had something on it every single fortnight, sometimes multiple orders. it got to the point that i was paying $400 a fortnight in repayments. afterpay isnt worth it, closing my account was and is the best thing i've ever done.
these services are super predatory to vulnerable people such as young adults, people on lower incomes, even people with mental health issues.
I feel stalked by google. I am a student n work for Klarna...I saw this title n felt attacked..
I'll just stick to buying things I can afford in cash. Like my Kate Spade purses from the boutique, when they finally go on sale.
One thing I wont pay for without a credit card again is a holiday. I paid my holiday in cash and Corona hit and STA Travel went out of business and I didnt get anything back due to paying in cash. Lesson learnt.
I’ve used Affirm twice. But they don’t approve me for much. The most I got approved for was $1100 when I bought a pre loved Damier Ebene Louis Vuitton Alma from The Real Real. It was basically new in the box with its dust bag so it was a bargain.
It’s scary in a way. I have to admit now wirh social media my interest in luxury buying had increased significantly. Before I would want things but now it’s more like a small obsession. Luckily I’m smart enough to know better because of my shopping experiences and credit card debt from my 20s. It’s very tempting because it allows us to buy thing that in reality we don’t need and can’t afford. I understand using it for items such as appliances we might need or something of the sort. But would never use it on a vintage Chanel bag. Saying that because I was tempted to last week actually.
I like to use afterpay and Paypal its pay in 4 every two weeks. I used it for a lot of things for about a year now. Although i agree with you. This sometimes makes me do impulse purchases, that i do regret, especially from the companies that are foreign and have very tricky and short period to return, that i dont want even bother with, but overall i am happy with it. Although i am checking constantly how much i still have to repay them, and looking to slowdown and make more thought through and not impulsive purchases . Blessings🙏💕
blazer looks so good on you!
I actually just did this for the first time, even though I could afford to purchase it outright. Waiting for my order to arrive today from Fashionphile. I only did it because it was interest free, and I don't like pulling out that much money out of my savings at one time, so why not? Also, I'm 44 and financially responsible, but if this were available when I was in my 20's and irresponsible, I would have gotten in trouble! Thank you for addressing this!
Not on topic, but that blazer is 🔥🔥 matches the new Porsche 😜
I would only pay with credit cards out of convenience in the store or because of shopper protection. My debit card has a safety limit on it, so depending on what I'm spending, I'd have to get cash from the bank. BUT credit card only if I can pay it off immediately.