I use this all the time. Bought my last TV like this and already paid it off. The thing is I can more than afford to pay the cost upfront, however, if I don't have to pay it, why wouldn't I? Leaves me extra money to invest. I wouldn't suggest doing this if you don't have the money or steady, guaranteed income. I do not miss payments. And just like a credit card or any debt....you get in trouble when you miss payments. If you're responsible, these are great deals.
There's no downside to yourself, but here's where all the talk of "subsidization" comes in. The merchants earn less money off of your purchases via BNPL, and thus may be inclined to raise prices for everyone.
@@WithYouIDisagree but then you can compare prices and then make an informed decision if you want to go with paylater or purchase direct from seller at a lesser cost, if purchasing through paylater is more costly.
Sorry but I disagree about higher prices. The prices stay the same whether I'm paying cash directly or over time. Klarna for example is regular prices with zero interest.
if my credit were solely based on my on-time payments on buy now pay later apps because i couldn't afford the whole price up front, i'd never be denied a thing- buy now pay later is wonderful
Nothing said in the video turned me off at all. I don’t spend money I can’t pay back. I don’t use this irresponsibly. I absolutely love it. Inflation and costs are getting out of control.
He is throwing so much shit into the video to make them sound horrible, also I am an eBay retailer and we do not give the buy pay later company any cuts on the price, they make money from whatever little interest the customer pays, no retailer is in the business of discounting items for the sake of selling.
I love them. Honestly I pay the amount before it's due based on my pay schedule so im always ahead of the payment or have it paid in full before the actual term. If you're working consistently and can afford the payment for the service break down, you're good to go.
I wouldn't have been able to furnish my apartment with essentials without afterpay and klarna. I was never approved for any credit cards since I was young and just starting to build credit. Plus my bi-weekly paychecks made it impossible to pay rent, buy groceries, and also drop $100 on sheets and pillows and mattress cover all in one month. Never made sense to me why my parents, who already have everything they need, could be approved for thousands of $ worth of credit but I who worked full time couldn't sleep on sheets and eat in the same week
I'm on the same boat as you. I was only approved for a credit card with a limit of $200. I had no credit until just recently and it makes getting anything expensive. But I'm also hear to say I'm proud of you! Keep going!
As a 22 yo who's just stepping into personal finance, I absolutely love the way you explained BNPL and compared it to everything with actual calculations. Amazing video, subscribed !
I have used everyone of these services for several purchases and I never have a problem at all, if you pay early or on time it doesn’t matter. If you’re not responsible enough to pay on time then you shouldn’t be doing monthly payments anyways.
That wasn't his point in the video though, you literally watched none of it and assumed that's what it was based on the topic. I recommend watching before commenting
The problem with these services is that eventually things start to getting more expensive. They know that people might not pay $200 for a product, but if it's split in 4 or more payments, they might the $200 or even more.
@@accelerationgate5089 It's an overall increase that happens over time, so either you won't notice, or you will have no choice (besides not purchasing the product altogether).
@@accelerationgate5089 The thing is, the alternatives will also increase. They will still be cheaper than the original product, but more expensive that what they were before, you know? It's like going from steak to eggs, and paying the old steak price on the eggs.
For those that don’t understand. The bottom line of the video is that the more people use these apps, it’s going to drive the price of items higher bc it’s costing the seller money just to accept this for of payment. What you don’t see behind the scenes is that sellers are being charged to accept these apps, and what they’re going to do is simply increase the price of the item.
Tbh if they wana take a small interest I say go ahead well deserved! These apps have allowed the working class and people struggling on benefits etc the opportunity to have nice things they deserve! In my eyes it’s a godsend to finally give the good people what they deserve to have.which is luxury
Plus Klarna is zero interest. The prices are regular and equal to paying in cash plus you can extend payment for up to 10 days after the original payment deadline. I've used them for 4 years, never had an issue, never missed a payment, I've extended a bunch of times with zero fees or interest and I used the left over money saves on enjoy my life more.
Not just nice things, but necessary things! People can't afford to pay full price for a new fridge when the old one dies, or new tires.. It's more affordable to split the price up with zero interest instead of using high interest loan companies or pay day loans or running up a credit card and paying monthly interest.
Yes. This is BS I support buy now pay later This helps consumers maximize their earning power. The Credit Card companies are not handing out credit. People are sentenced to prison shorter times than it takes to improve credit. These programs are a Godsend and I resent these programs being demonized.
Tell me what was the talking points against these programs in the video if you resent all forms of criticism against them? I want to see if you actually watched it, because most clearly haven't
@@Hybred Are you the Comment Police? Regardless of whether I did or didn't I still resent these programs being under investigation by the likes of Elizabeth Warren who passes legislation under the guise of consuner protection but Really is Protecting Big Banks.
i still like em cause i cant save money and paying that 25$ every 2 weeks is a whole lot easier i dont care if theyre getting benefits i still get my item instantly and i dont have to pay interest with my one
It is shady that they basically target people who won't pay on time by incentivizing them to do a payment plan for something they already can't afford but it's nice for the people who have the money/income to make payments on time every time.
seems alright if u responsible and make ur first 4 payment, they make their money off the merchandiser. either way its great to have options you never know, just be responsible which most people will not
This is why I use klarna only on my payday.... because it will line up with my checks. I've never missed a payment nor do I buy anything over my limit.
Thank you for your information. I used the BNPL to purchase small items for my apartment. I usually pay off my BNPL prior to the due date. I pay in advance. It really accommodates me a lot and I try not to over spend.
BNPL not only gives buyers additional options to finance their purchase, but it helps the merchants get more business. I like how BNPL can lower the barrier to customer acquisition and at the same time be more wallet friendly to consumers
Like all credit, a double-edged sword. I agree that it has been beneficial for getting access to those who have been denied traditional credit, but at the same time it's clear that a lot of people are getting negatively affected too, given the rate of non-payment.
@@J888FLD I know right, too many people are trying to say that Affirm is a bad idea or buy now pay later aps, I absolutely love them, and i have credit cards as well...... This guy and a lot of others like him are idiots, these aps can help people and be very beneficial to certain people.....
@@andyrichardson9778 the idiot here is you for not understanding the video. The more you use these apps, the more the sellers are going to end up increasing their item prices bc it’s costing the seller more money to accept that form of payment.
Thank you for the video. The trick that I use when using these companies. I only shop on my payday, that way when the next payment is due it's another payday. They will hit your credit if you do not pay as agreed. However, if you do pay on time this can be helpful.
I used to take calls for one of these companies and trust when I say everything you said is true. Most of the calls we took were customers who had missed payments because of a "compromised card" or so they said and they are still charged the late fee. What's worse is that if they needed to return the product they thought we (the BNPL) were responsible for their refund and we weren't, the merchant was. So they had to contact the merchant and most merchants nowadays do not have a customer service phone number. It was a pain.
Must not have been the big 3 then (klarna, sezzle, zip). They all always take care of the refund side. So long as you return the item to the merchant. Also if an item is late or the wrong item, they also take care of that as well. Hell, most of the time they are better about refunds with late items than the actual merchant. Also a (compromised card) is just a customer saying they didn't have the funds. You have multiple days they remind you a payment will be processing to change the card, on top of they give you several extensions per payment.
Seems to me another hidden cost is the retailer increasing the base price of the item to offset the spread on BNPL. A cost which all of us pay no matter what method we use.
Thanks Prete - My kids have asked me about this and I told them that somebody has to be making money but you have explained it well. I'll pass along the knowledge.
New subscriber here! Love the video, I live in Canada and i agree with you on the long term cost increase part. There is a reason all the etnic grocery stores like Chinese and Indian stores dont accept credit cards! Compare their prices to Walmart or Fortinos and you will get why BNPL is gonna increase the overall cost of shopping for customers
If you're good with your finances, these are fantastic resources. They report to the credit agencies and allow you the item up front. It's like rent-a-center for "other than home" items. If you don't have a steady income, stay away from these resources.
I have had no problem with these apps. In fact theyd have treated me we'll when I dont have the cash. This dude works for the Credit card companies running your credit. After pay dont. Unless you dont pay back.
I had to use afterpay for the very first time for an urgent car repair which really got me out of a jam as I couldn't front up with the full amount at the time.
The online merchants I use have already raised prices to use BNPL so you pay more now regardless. May as well use it if you are getting charged for it anyway is my thought. Helps me when buying clothes. If I need to return, I still have 75% of the cost of the item available to reorder correct size or better fitting item without having to wait for the seller to receive the item back and then process the refund. By the time you wait for all of that, the item you want can be sold out. I love BNPL for clothing purchases and use it every time even though I could pay with debit, it makes sense for me..
The part of this story you left out is they report to credit bureau which can help some people build credit and just because you use this service doesn't mean you go full term I personal used them have over 100k in available credit but I chose them because its easy to buy keeping. My credit card for other purchases vie used affirm for years now the can boost your credit score and you. Can pay off in full when ever you want good way to boost you score it reported on your credit bureau as personal loan I think these service are great for short term purchases
I also do not use credit cards. A lesson I learned earlier in my life. If you don’t have the cash, you can’t afford it. Never bank on the the future as anything can happen. Most purchases have no collateral value. I financed my home and a bit of the cost of my car for a short term, but these could have easily been sold and their value always exceeded the loan amount. Likewise, I never use BNPL unless I can afford to pay it off today if something unforeseeable happens. It is convenient though for me.
Its like the U.S. economy relies on ongoing credit and debt generation from consumers for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. Meanwhile, foreign nations continue to desire the U.S. dollar, despite their own economies facing significant challenges, some even worse than that of the U.S. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.
I think a lot of people feel the same way. There is a proposal in at least one country (Australia) to let merchants add the cost of BNPL to the purchase price. It's estimated that 60% of consumers would then opt to use a different payment if they see the charge added at checkout as a surcharge.
Use buy now pay later to buy, use credit card to pay buy now pay later. Win win. You get rewards, the buy now pay later 0 interest, AND more time to pay it off since credit card bills are per month and if pay in full, no interest either.
I live in Australia and I use Afterpay for my dental work and some small items on eBay and it works for me. However, I didn't have enough money in my savings account and I had to pay a ten-dollar late fee.
This sounds like a shill for the big credit companies that don’t want this as an option because it cuts into their bottom line a lil. Don’t miss a payment. This guy is assuming we are all negligent with financial agreements.
I've been using these since they came out and as a single parent the costs hurt less. I've never missed a payment but I do understand how people could potentially get out of hand and each additional $25 payment plan biweekly could put them closer to an overdraft potentially.
1. Pay bills first. 2. Pay like food expenses and any that need to be survived. 3. Once paid off, save for in case of an emergency. 4. Invest in 401k or work with your financial advisor to become wealthy. 5. Have cash or prepaid debit card on hand and use a little bit of money for fun, but don't let it blow all away. ;)
I'm so paranoid about everything and kept seeing these buy now and pay in instalments things which even after claiming to be interest free added very tiny additions to the total cost. I am so glad I watched this video before making the purchase it's better to save up before purchasing.
It has worked for me. If you can pay it off in three or four months, why not? They can make a little profit, which is normal, but I also profit by paying what I can afford with what I have🙌🏼
These also "trick" my brain into going, "pffft it's only $25, I can afford that every two weeks!" and fortunately I'm a lot more responsible with my money in my mid 30's than I was in my early 20's. I'd be curious to see the data on the demographic that makes up the missed payments (age wise)
Great video. The only issue with save now, pay later for discretionary purchases is that often times the price of the item will have increased by the time you’ve saved up.
I found it very interesting that people are considering the BNPL route as a payment option. I feel like whenever I see those paybright options when I checkout, I always ignore it because I don't want to be making payments over a certain period of time which could lead to missing payments. The fact that there's a big business around consumers missing payments is ridiculous to me lol. I'm 24 and I like to just make my payments with my credit card, rack up the points or cash back, and then pay off my bill on a monthly basis in full. Maybe I'm younger so maybe my opinion is a little bit biased, and I will change as I get older (not saying I'll miss payments). Great video tho Preet. Love learning from a trusted source!
You're doing it right! Another problem with the various BNPLs is that you can forget how much spending room you have in a month when you have multiple sources of payments. Especially if people use multiple BNPLs online, as well as credit cards in person, and of course all the subscriptions that seem to add up like dirty dishes lol
@@PreetBanerjee hence I stick to two, after pay and zip, I know its my limit and it can get messy. So many BNPL are popping up. Used correctly its easy to manage, however I can see shopaholic getting themselves into trouble. On the flip not my problem lol except I don't want a few spoiling it for vast majority which could happen.
@@PreetBanerjee if you can afford to buy it then you can afford to pay the price on payments....if you can afford something that's 200 then you can afford to pay 50 now and the rest every 2 weeks...
@@desari2866 But if I can afford 200 now why not pay 200 now and avoid the overhead of remembering those other payments are coming out? The interest over 8 weeks is NOT worth the headache
after using Klarna i dont have any problems with "buy now pay later". The every two weeks pay schedule works great and i dont miss the $25 pay when i can easily put it back. This is good for those on a budget or dont want to pay all at once.
Really liked this video. Variation of merchant fees is a really good perspective. Even better would be to see how much volume each of these payment methods get and also from what economical class. I'd assume that those who're able to afford single payment via credit cards will still go for credit card payments to get those rewards as bnpl doesn't really give you any rewards. So bnpl might be boosting cart conversions of people who are at fence due to income cap/gig economy workers which is honestly great for both parties in a normal economical environment.
Here in Australia they aren't just online you can use them in stores as well. Mainly afterpay and zippay because we have a tap and pay system so they give you a virtual card to tap in store
This is easy. It's clear what the terms are especially with klarna. Pay on-time and everything is sweet. Nothing wrong with this at all. The only people whining about this are the freeloaders that don't pay.
But nothing you said really "hurts" the consumer if anything it hurts the merchant. I don't know maybe I missed something but it seems like bnpl is in favor of the average consumer.
Not a bad video, good information. I have no issues with the BNPL companies & I will continue to use them. I don’t miss payments, and I actually pay them early.
You just have to stay responsible with it but it’s great. When the pandemic first started and my overtime was cut down at work it helped with things I needed. Even with groceries zip pay let me use instacart and that was the best thing ever. As long as you don’t spend way over then what you can afford you will be fine
I Iove it, I use it for emergency if I need to get something in a hurry. I just notice different companies have different ways to pay back and can get complicated. Allowing flexibility to pay early or change the dates. Gone are days for lay-bys!
Why would you multiply by the days in the year and divide by the length of the loan. It’s not charging 6% every day you have the loan. It’s taking 6% total. Converting it to API makes no sense to me. Can you explain?
Think of it like an annualized rate conversion. When you think of a mortgage with a rate of 4%, you know that's 4% interest per year. But if you were told you would be paying 4% of the balance owing over three months, you would want to know how that compares to an annual rate (which is more common). It would be closer to 12%.
There no darkside, I'm able to buy designer clothing without putting on my credit card. Therefore not going on my credit report showing credit card debit!
Aww man, just when I thought I was doing well (I always paid in full until recently for a birthday present.) I thought that it would help me be more responsible, hmm. Thanks for this!
I can certainly see how some might look at it that way: with poor credit card habits they might stretch the repayment for many months (maybe years!), and with a BNPL they might see it as "I'll be done paying this off in two months". For some, that might be a step in the right direction. The problems for them would crop up if they missed a payment and then the costs can increase dramatically.
@@PreetBanerjee Yes, that's a great point. The way your finances are set up and ultimately your goal as a consumer should dictate the way you spend your money. Knowing about the merchant's side makes me want to be a more conscious buyer. Speaking on credit card balances, I noticed that my credit wouldn't move when I paid my bill off in full before the statement hit, but that it would raise if I left a balance (less than 30% with 7-10% being ideal.) Do you have any videos on that?
@@BettyAlexandriaPride Do you mean your credit score? I don't have videos on that, but you should check out The Debt Free in 30 channel. Amazing content on all things credit (and more): ruclips.net/channel/UCmBd1vf4gtOj8QE5JdiNFRQ
@@PreetBanerjee Yes, specifically, why does it seem like my credit score is rewarded (points go up) by keeping a balance but remains neutral for having a zero balance. I'll look into them, thanks!
In the UK, a lot of stores do not accept Amax or they only take Amax for payments over a certain amount . They always say it costs to much. I never understood why until now, so thank you!
the consumer debts in western world are at the all time high. People buying stupid shit with borrowed money have no idea that these companies are ripping them off. My rule of thumb is “if you have to finance your purchase, then you can’t afford it “. you don’t want to be a debt slave for the rest of your life. Great video!
Yeah....Maybe The debt is High....But the NPA ratio of these debts are lower in Western compared to Eastern Counterparts....So I don't see a big problem.....
So if a disabled diabetic with a monthly income of $900 needs a new fridge to keep their insulin cold shouldn't get a new fridge because they can't afford it? There are plenty of necessities that cannot be afforded by some. Don't think these people don't know they are being ripped off, rather they have no choice.
I use it as a customer and I use it for my business. Ive never missed a payment, does it suck on the business side, yes but as a customer i would rather use bnpl
I’ve been using klarna for years now, never had any issues. Is really all about balancing yourself and knowing how to manage your money, specially when you have daily income coming in, you should be able to pay off your balance in those 2 months
No downside I booked and paid for my Cruise with after pay Carnival Gift Cards. Paid the Gift cards off on less than a month. I don't spend what I can't pay back.
They’re huge in Australia because it’s harder to get higher credit card limits for bigger purchases. There used to be companies that would do rent to own that we’re getting away with 25% interest rates and when BNPL apps came along you could finally buy a $650 laptop for $650 instead of $1,500. They were a game changer and all those rent to own businesses closed down.
I use this all the time. Bought my last TV like this and already paid it off. The thing is I can more than afford to pay the cost upfront, however, if I don't have to pay it, why wouldn't I? Leaves me extra money to invest. I wouldn't suggest doing this if you don't have the money or steady, guaranteed income. I do not miss payments. And just like a credit card or any debt....you get in trouble when you miss payments. If you're responsible, these are great deals.
Exactly I use them all, pay them off even before time and there are options to extend payment. I love them
I agree.
I totally agree.
There's no downside to yourself, but here's where all the talk of "subsidization" comes in. The merchants earn less money off of your purchases via BNPL, and thus may be inclined to raise prices for everyone.
@@WithYouIDisagree but then you can compare prices and then make an informed decision if you want to go with paylater or purchase direct from seller at a lesser cost, if purchasing through paylater is more costly.
As a kid of the 80s we knew this as Layaway,
Except you had to pay it all off before you had your item... otherwise, pretty much same concept.
This is qvc now a day
I was able to buy xmas gifts with these apps. Whoever created these deserves an award. Thank you.
They do get an award. Profits. Which are paid for in the form of higher prices over time borne by consumers.
@@PreetBanerjee yep
Me to I love it it worked for me yayyyy
@@PreetBanerjee i didn’t notice any price hikes
Sorry but I disagree about higher prices. The prices stay the same whether I'm paying cash directly or over time. Klarna for example is regular prices with zero interest.
if my credit were solely based on my on-time payments on buy now pay later apps because i couldn't afford the whole price up front, i'd never be denied a thing- buy now pay later is wonderful
Right I’ve been using them for 3 or 4 years and have never missed a payment ever.
Same, the literal only downside is fees if you don't pay on time, but that is the same as any other credit service. I do the same with Paypal Credit.
😂😂😂
Sad
Nothing said in the video turned me off at all. I don’t spend money I can’t pay back. I don’t use this irresponsibly. I absolutely love it. Inflation and costs are getting out of control.
He is throwing so much shit into the video to make them sound horrible, also I am an eBay retailer and we do not give the buy pay later company any cuts on the price, they make money from whatever little interest the customer pays, no retailer is in the business of discounting items for the sake of selling.
True. Because it's not the business but the people who are abusing this
I love them. Honestly I pay the amount before it's due based on my pay schedule so im always ahead of the payment or have it paid in full before the actual term. If you're working consistently and can afford the payment for the service break down, you're good to go.
So its like credit card? If you dont pay before due date you'll get an interest? No hidden charges after you complete the payments?
What app do you use?
@@inversemightloze klarna is most reliable
I wouldn't have been able to furnish my apartment with essentials without afterpay and klarna. I was never approved for any credit cards since I was young and just starting to build credit. Plus my bi-weekly paychecks made it impossible to pay rent, buy groceries, and also drop $100 on sheets and pillows and mattress cover all in one month. Never made sense to me why my parents, who already have everything they need, could be approved for thousands of $ worth of credit but I who worked full time couldn't sleep on sheets and eat in the same week
I'm on the same boat as you. I was only approved for a credit card with a limit of $200. I had no credit until just recently and it makes getting anything expensive. But I'm also hear to say I'm proud of you! Keep going!
As a 22 yo who's just stepping into personal finance, I absolutely love the way you explained BNPL and compared it to everything with actual calculations. Amazing video, subscribed !
He sounds like he is a spokesperson for the credit card industry. BNPL -vs- Credit Card Companies.
I have used everyone of these services for several purchases and I never have a problem at all, if you pay early or on time it doesn’t matter. If you’re not responsible enough to pay on time then you shouldn’t be doing monthly payments anyways.
💯🙌
That wasn't his point in the video though, you literally watched none of it and assumed that's what it was based on the topic. I recommend watching before commenting
As @Hybred said, you didn't watch the video.
Legit
I got lucky and mine unintentionally get out on apo which is handy when things get really busy for me
The problem with these services is that eventually things start to getting more expensive. They know that people might not pay $200 for a product, but if it's split in 4 or more payments, they might the $200 or even more.
@@accelerationgate5089 It's an overall increase that happens over time, so either you won't notice, or you will have no choice (besides not purchasing the product altogether).
@@accelerationgate5089 The thing is, the alternatives will also increase. They will still be cheaper than the original product, but more expensive that what they were before, you know? It's like going from steak to eggs, and paying the old steak price on the eggs.
Why do you think companies use these. They know people can’t afford the shit their selling and profits are down
For those that don’t understand. The bottom line of the video is that the more people use these apps, it’s going to drive the price of items higher bc it’s costing the seller money just to accept this for of payment. What you don’t see behind the scenes is that sellers are being charged to accept these apps, and what they’re going to do is simply increase the price of the item.
Not if the retail price is set by the manufacture.
Tbh if they wana take a small interest I say go ahead well deserved! These apps have allowed the working class and people struggling on benefits etc the opportunity to have nice things they deserve! In my eyes it’s a godsend to finally give the good people what they deserve to have.which is luxury
Plus Klarna is zero interest. The prices are regular and equal to paying in cash plus you can extend payment for up to 10 days after the original payment deadline. I've used them for 4 years, never had an issue, never missed a payment, I've extended a bunch of times with zero fees or interest and I used the left over money saves on enjoy my life more.
Not just nice things, but necessary things! People can't afford to pay full price for a new fridge when the old one dies, or new tires.. It's more affordable to split the price up with zero interest instead of using high interest loan companies or pay day loans or running up a credit card and paying monthly interest.
Yeah but klana and affirm do a soft credit check.
@@carissahowell oh for sure that how I manage to afford the expensive shit lol. Makes Christmas a lot better too
@@AhmedAli-qb5hu I also love the rewards from Klarna. I've probably gotten 50.00 in Amazon cards so far.
Yes. This is BS
I support buy now pay later
This helps consumers maximize their earning power. The Credit Card companies are not handing out credit. People are sentenced to prison shorter times than it takes to improve credit. These programs are a Godsend and I resent these programs being demonized.
💯👍👍
Tell me what was the talking points against these programs in the video if you resent all forms of criticism against them? I want to see if you actually watched it, because most clearly haven't
@@Hybred Are you the Comment Police?
Regardless of whether I did or didn't I still resent these programs being under investigation by the likes of Elizabeth Warren who passes legislation under the guise of consuner protection but Really is Protecting Big Banks.
@@Hybred his talking point was literally saying "Its better to use credit card or save now buy later"... When it's literally NOT better.
No. People shouldn't be buying things they can't afford because when they can't make the payments they cry foul and cause companies to lose money
i still like em cause i cant save money
and paying that 25$ every 2 weeks is a whole lot easier i dont care if theyre getting benefits i still get my item instantly and i dont have to pay interest with my one
Exactly
Did anyone stop to think why these programs become so popular? We are poor and this our only option……
Personally these bnpl companies are way more beneficial than harmful.
It is shady that they basically target people who won't pay on time by incentivizing them to do a payment plan for something they already can't afford but it's nice for the people who have the money/income to make payments on time every time.
seems alright if u responsible and make ur first 4 payment, they make their money off the merchandiser. either way its great to have options you never know, just be responsible which most people will not
Agreed
This is why I use klarna only on my payday.... because it will line up with my checks. I've never missed a payment nor do I buy anything over my limit.
Thank you for your information. I used the BNPL to purchase small items for my apartment. I usually pay off my BNPL prior to the due date. I pay in advance. It really accommodates me a lot and I try not to over spend.
I don't care if they have to charge some extra costs, I use all these companies and I love them. It makes my life so much easier.
Never had any problems or barely any fees for using these. I am continue using them! 😊
I'm sorry, these Apps have helped me in such a hard time as this. I don't have the luxury to always pay upfront. 🤷
exactly!!!!! Let ppl purchase however is best for them same as a lay a way
@@cah0177 literally no one is stopping you, yall act like being informed on the negatives is like they are banning you from this app. 🙄
@@Angelynkd4 literally I don’t care 🙄 move along cupcake
@@Angelynkd4 listen, I'm in my 40s okay when they're is a majority that continues to speak against something, eventually it will be banded.
@@cah0177 idk why you let a RUclips video hurt your feels but clearly you care atleast a bit what randos on the internet think. 😂
BNPL not only gives buyers additional options to finance their purchase, but it helps the merchants get more business. I like how BNPL can lower the barrier to customer acquisition and at the same time be more wallet friendly to consumers
Like all credit, a double-edged sword. I agree that it has been beneficial for getting access to those who have been denied traditional credit, but at the same time it's clear that a lot of people are getting negatively affected too, given the rate of non-payment.
@@PreetBanerjee but your logic is flawed, because the same thing would happen if you used a credit card and then didn’t pay! 🤔
@@J888FLD I know right, too many people are trying to say that Affirm is a bad idea or buy now pay later aps, I absolutely love them, and i have credit cards as well...... This guy and a lot of others like him are idiots, these aps can help people and be very beneficial to certain people.....
@@andyrichardson9778 the idiot here is you for not understanding the video. The more you use these apps, the more the sellers are going to end up increasing their item prices bc it’s costing the seller more money to accept that form of payment.
These services are the only way I can afford to clothe myself…it also helped me furnish part of my first apartment.
Thank you for the video. The trick that I use when using these companies. I only shop on my payday, that way when the next payment is due it's another payday. They will hit your credit if you do not pay as agreed. However, if you do pay on time this can be helpful.
This is the same thing I do...I was just telling another commenter this...I only use klarna on my payday because it lines up with my checks.
Let me help you out. There's no downside. Goodbye!
I used to take calls for one of these companies and trust when I say everything you said is true. Most of the calls we took were customers who had missed payments because of a "compromised card" or so they said and they are still charged the late fee. What's worse is that if they needed to return the product they thought we (the BNPL) were responsible for their refund and we weren't, the merchant was. So they had to contact the merchant and most merchants nowadays do not have a customer service phone number. It was a pain.
Thank you for sharing your experience 😊
i have the money for it but I get rewards soooo
Must not have been the big 3 then (klarna, sezzle, zip). They all always take care of the refund side. So long as you return the item to the merchant. Also if an item is late or the wrong item, they also take care of that as well. Hell, most of the time they are better about refunds with late items than the actual merchant. Also a (compromised card) is just a customer saying they didn't have the funds. You have multiple days they remind you a payment will be processing to change the card, on top of they give you several extensions per payment.
What merchant doesn't have access to customer service??
Seems to me another hidden cost is the retailer increasing the base price of the item to offset the spread on BNPL. A cost which all of us pay no matter what method we use.
Thanks Prete - My kids have asked me about this and I told them that somebody has to be making money but you have explained it well. I'll pass along the knowledge.
Yes, hundreds and maybe thousands of people are working for BNPL companies. Their wages have to come from somewhere!
I'm still waiting on him to explain the dark side of these apps.....
New subscriber here! Love the video, I live in Canada and i agree with you on the long term cost increase part.
There is a reason all the etnic grocery stores like Chinese and Indian stores dont accept credit cards! Compare their prices to Walmart or Fortinos and you will get why BNPL is gonna increase the overall cost of shopping for customers
Thanks for subbing and thanks for the comment!
Everyone wants an Amex card but no one likes accepting it..
If you're good with your finances, these are fantastic resources.
They report to the credit agencies and allow you the item up front.
It's like rent-a-center for "other than home" items.
If you don't have a steady income, stay away from these resources.
They don't and Rent a Center doesn't report to credit bureaus either. Unless you default.
@@tarakennedy707 ahh, thanks for the info!
I've never run into that, as I don't default, but thanks for letting me know!
@@tarakennedy707 sezzle for sure reports to credit. I have it on mine.
i use rent a center they don't report to the credit bureaus all u have to do is make sure u have the money when the payment is due its that simple
Better than RAC (and Aaron’s) because you’re not paying 4-8x what the item costs everywhere else over the course of the loan.
I stop watching because I raised my credit score using these apps. Works for me dude, because score was crappy
I used to work for an office supply retailer in Europe, and we simply stopped accepting AmEx because their fees were just unacceptable to our company.
Thanks for sharing that!
was it worth losing your customers
@@lolbots This is Europe. AmEx is rare, and most of the companies that have one can also just as well use something like Visa or Mastercard...
I have had no problem with these apps. In fact theyd have treated me we'll when I dont have the cash. This dude works for the Credit card companies running your credit. After pay dont. Unless you dont pay back.
I'm sending this to my family. I appreciate you working out the math and breaking down the various aspects of BNPL.
This is no different than credit cards really. They have the exact same system.
I have great income, 12 credit cards in great standing, and AND I STILL US afterpay🤷🏽♀️. I love it.
I had to use afterpay for the very first time for an urgent car repair which really got me out of a jam as I couldn't front up with the full amount at the time.
Right! This video is simply for people making 100K and higher! Or just filthy rich!
right!...the well off can't stand the fact that people struggling are now given an option.
The online merchants I use have already raised prices to use BNPL so you pay more now regardless. May as well use it if you are getting charged for it anyway is my thought. Helps me when buying clothes. If I need to return, I still have 75% of the cost of the item available to reorder correct size or better fitting item without having to wait for the seller to receive the item back and then process the refund. By the time you wait for all of that, the item you want can be sold out. I love BNPL for clothing purchases and use it every time even though I could pay with debit, it makes sense for me..
Very easy to fall into this trap, the minute you lose a job or have an emergency that takes priority- it’s over, then come the fees
There is no dark side unless the customer makes a dark side. Pay your payments.
The part of this story you left out is they report to credit bureau which can help some people build credit and just because you use this service doesn't mean you go full term I personal used them have over 100k in available credit but I chose them because its easy to buy keeping. My credit card for other purchases vie used affirm for years now the can boost your credit score and you. Can pay off in full when ever you want good way to boost you score it reported on your credit bureau as personal loan I think these service are great for short term purchases
Thanks for mentioning this. Exactly what i wanted to know. You reccomend affirm?
I was wondering if they report to the credit bureaus, I’ve used a few of these BNPL options with no issues.
I've been using them for about 4 yrs no problem
No they don’t lol I’d have 700+ if they did
@@souls1lver This is what I thought, I thought that they didn't.
I also do not use credit cards. A lesson I learned earlier in my life. If you don’t have the cash, you can’t afford it. Never bank on the the future as anything can happen. Most purchases have no collateral value. I financed my home and a bit of the cost of my car for a short term, but these could have easily been sold and their value always exceeded the loan amount. Likewise, I never use BNPL unless I can afford to pay it off today if something unforeseeable happens. It is convenient though for me.
Its like the U.S. economy relies on ongoing credit and debt generation from consumers for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. Meanwhile, foreign nations continue to desire the U.S. dollar, despite their own economies facing significant challenges, some even worse than that of the U.S. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.
I have yet to hear a convincing argument against these for the consumer. I'm taking 0% interest every single time.
I've used BNPL apps after watching this video. Cheers
The price is listed as the same. Its not like retailers give ME the 6% cut. As a debt free consumer, I’m buying now and paying later whenever I can.
I think a lot of people feel the same way. There is a proposal in at least one country (Australia) to let merchants add the cost of BNPL to the purchase price. It's estimated that 60% of consumers would then opt to use a different payment if they see the charge added at checkout as a surcharge.
Use buy now pay later to buy, use credit card to pay buy now pay later. Win win. You get rewards, the buy now pay later 0 interest, AND more time to pay it off since credit card bills are per month and if pay in full, no interest either.
Huh... I did not know how it would affect the merchant!
Thanks for the video!
I've been using a couple of local bnpl services. They've been a lifesaver. Also I've been able to get offers sometimes 30-35% discounts.
I live in Australia and I use Afterpay for my dental work and some small items on eBay and it works for me. However, I didn't have enough money in my savings account and I had to pay a ten-dollar late fee.
How can you use it for dental work?
This sounds like a shill for the big credit companies that don’t want this as an option because it cuts into their bottom line a lil. Don’t miss a payment. This guy is assuming we are all negligent with financial agreements.
Excellent explanation in a simple manner. Thank you!
I've been using these since they came out and as a single parent the costs hurt less. I've never missed a payment but I do understand how people could potentially get out of hand and each additional $25 payment plan biweekly could put them closer to an overdraft potentially.
1. Pay bills first.
2. Pay like food expenses and any that need to be survived.
3. Once paid off, save for in case of an emergency.
4. Invest in 401k or work with your financial advisor to become wealthy.
5. Have cash or prepaid debit card on hand and use a little bit of money for fun, but don't let it blow all away. ;)
I don't even care. I bought alot of things from these apps just make sure you can afford it everytime it comes outta your account.
I'm so paranoid about everything and kept seeing these buy now and pay in instalments things which even after claiming to be interest free added very tiny additions to the total cost. I am so glad I watched this video before making the purchase it's better to save up before purchasing.
As Consumer You can't Exscape Retail prices unless it's set as discount.
It has worked for me. If you can pay it off in three or four months, why not? They can make a little profit, which is normal, but I also profit by paying what I can afford with what I have🙌🏼
It depends on the amount you are trying to charge your account with . I think it’s great personally
These also "trick" my brain into going, "pffft it's only $25, I can afford that every two weeks!" and fortunately I'm a lot more responsible with my money in my mid 30's than I was in my early 20's. I'd be curious to see the data on the demographic that makes up the missed payments (age wise)
Great video. The only issue with save now, pay later for discretionary purchases is that often times the price of the item will have increased by the time you’ve saved up.
or the stock will run out and you might have to wait months plus a higher price...
I found it very interesting that people are considering the BNPL route as a payment option. I feel like whenever I see those paybright options when I checkout, I always ignore it because I don't want to be making payments over a certain period of time which could lead to missing payments. The fact that there's a big business around consumers missing payments is ridiculous to me lol. I'm 24 and I like to just make my payments with my credit card, rack up the points or cash back, and then pay off my bill on a monthly basis in full. Maybe I'm younger so maybe my opinion is a little bit biased, and I will change as I get older (not saying I'll miss payments). Great video tho Preet. Love learning from a trusted source!
You're doing it right! Another problem with the various BNPLs is that you can forget how much spending room you have in a month when you have multiple sources of payments. Especially if people use multiple BNPLs online, as well as credit cards in person, and of course all the subscriptions that seem to add up like dirty dishes lol
@@PreetBanerjee hence I stick to two, after pay and zip, I know its my limit and it can get messy. So many BNPL are popping up. Used correctly its easy to manage, however I can see shopaholic getting themselves into trouble. On the flip not my problem lol except I don't want a few spoiling it for vast majority which could happen.
@@PreetBanerjee if you can afford to buy it then you can afford to pay the price on payments....if you can afford something that's 200 then you can afford to pay 50 now and the rest every 2 weeks...
@@desari2866 But if I can afford 200 now why not pay 200 now and avoid the overhead of remembering those other payments are coming out? The interest over 8 weeks is NOT worth the headache
after using Klarna i dont have any problems with "buy now pay later". The every two weeks pay schedule works great and i dont miss the $25 pay when i can easily put it back. This is good for those on a budget or dont want to pay all at once.
Excellent information and thorough breakdown, thank you.
You’re welcome!
Really liked this video. Variation of merchant fees is a really good perspective. Even better would be to see how much volume each of these payment methods get and also from what economical class. I'd assume that those who're able to afford single payment via credit cards will still go for credit card payments to get those rewards as bnpl doesn't really give you any rewards.
So bnpl might be boosting cart conversions of people who are at fence due to income cap/gig economy workers which is honestly great for both parties in a normal economical environment.
AMAZING video
Very thorough, no fluff, no background music, labeled sections to the video 🙌🏼🙌🏼
He must be a representative for interest earning banks. Works great for me.
Here in Australia they aren't just online you can use them in stores as well. Mainly afterpay and zippay because we have a tap and pay system so they give you a virtual card to tap in store
This is easy. It's clear what the terms are especially with klarna. Pay on-time and everything is sweet. Nothing wrong with this at all. The only people whining about this are the freeloaders that don't pay.
So! Everything cost money. We are not stupid enough to think we are getting something for free. If it helps someone, don’t knock it.
But nothing you said really "hurts" the consumer if anything it hurts the merchant. I don't know maybe I missed something but it seems like bnpl is in favor of the average consumer.
Increased cost of payment acceptance increases the prices for everyone.
@@PreetBanerjee ok that makes sense
There is no Darkseid. People that have been shut out are given a chance as long as they make the money. You know what you sign up for
Not a bad video, good information. I have no issues with the BNPL companies & I will continue to use them. I don’t miss payments, and I actually pay them early.
You just have to stay responsible with it but it’s great. When the pandemic first started and my overtime was cut down at work it helped with things I needed. Even with groceries zip pay let me use instacart and that was the best thing ever. As long as you don’t spend way over then what you can afford you will be fine
Great companies never had a problem with any of them!
I Iove it, I use it for emergency if I need to get something in a hurry. I just notice different companies have different ways to pay back and can get complicated. Allowing flexibility to pay early or change the dates. Gone are days for lay-bys!
Amazing video. So much clarity on how the BNPL business model actually works. Thumbs Up Preet
Thanks, Salman!
I don’t see nothing wrong with them. They have been nothing but a blessing to me.
These apps literally make it possible for people to buy things we couldn't afford outright. I owe every Christmas to these apps
I have to say, this video was highly informative considering I'm currently behind on payment for my BNPL scooter.
Subscribed!
Why would you multiply by the days in the year and divide by the length of the loan. It’s not charging 6% every day you have the loan. It’s taking 6% total. Converting it to API makes no sense to me. Can you explain?
Think of it like an annualized rate conversion. When you think of a mortgage with a rate of 4%, you know that's 4% interest per year. But if you were told you would be paying 4% of the balance owing over three months, you would want to know how that compares to an annual rate (which is more common). It would be closer to 12%.
Neither Sezzle or affirm report to credit bureaus.
There no darkside, I'm able to buy designer clothing without putting on my credit card. Therefore not going on my credit report showing credit card debit!
Thought about integrating a BNPL app, hmm now thinking twice!... Thanks for the vid Preet!
Aww man, just when I thought I was doing well (I always paid in full until recently for a birthday present.) I thought that it would help me be more responsible, hmm. Thanks for this!
I can certainly see how some might look at it that way: with poor credit card habits they might stretch the repayment for many months (maybe years!), and with a BNPL they might see it as "I'll be done paying this off in two months". For some, that might be a step in the right direction. The problems for them would crop up if they missed a payment and then the costs can increase dramatically.
@@PreetBanerjee Yes, that's a great point. The way your finances are set up and ultimately your goal as a consumer should dictate the way you spend your money. Knowing about the merchant's side makes me want to be a more conscious buyer.
Speaking on credit card balances, I noticed that my credit wouldn't move when I paid my bill off in full before the statement hit, but that it would raise if I left a balance (less than 30% with 7-10% being ideal.) Do you have any videos on that?
@@BettyAlexandriaPride Do you mean your credit score? I don't have videos on that, but you should check out The Debt Free in 30 channel. Amazing content on all things credit (and more): ruclips.net/channel/UCmBd1vf4gtOj8QE5JdiNFRQ
@@PreetBanerjee Yes, specifically, why does it seem like my credit score is rewarded (points go up) by keeping a balance but remains neutral for having a zero balance. I'll look into them, thanks!
In the UK, a lot of stores do not accept Amax or they only take Amax for payments over a certain amount . They always say it costs to much. I never understood why until now, so thank you!
the consumer debts in western world are at the all time high. People buying stupid shit with borrowed money have no idea that these companies are ripping them off. My rule of thumb is “if you have to finance your purchase, then you can’t afford it “. you don’t want to be a debt slave for the rest of your life. Great video!
that's dumb, you buy your cars in cash?
Yeah....Maybe The debt is High....But the NPA ratio of these debts are lower in Western compared to Eastern Counterparts....So I don't see a big problem.....
It's a big difference for products that are expensive but last a long time. Most people can't buy a new fridge in cash if they needed to, for example
@@lolbots I certainly buy my cars in cash don't be a sucker
So if a disabled diabetic with a monthly income of $900 needs a new fridge to keep their insulin cold shouldn't get a new fridge because they can't afford it? There are plenty of necessities that cannot be afforded by some. Don't think these people don't know they are being ripped off, rather they have no choice.
I use it as a customer and I use it for my business. Ive never missed a payment, does it suck on the business side, yes but as a customer i would rather use bnpl
I’ve been using klarna for years now, never had any issues. Is really all about balancing yourself and knowing how to manage your money, specially when you have daily income coming in, you should be able to pay off your balance in those 2 months
No downside I booked and paid for my Cruise with after pay Carnival Gift Cards. Paid the Gift cards off on less than a month. I don't spend what I can't pay back.
These companies are great for products that are usually overpriced such as Videogames and workout supplements
I've had noooo problems using all these at all, actually I love using them on a regular basis. I highly recommend them
Good 👍
They’re huge in Australia because it’s harder to get higher credit card limits for bigger purchases. There used to be companies that would do rent to own that we’re getting away with 25% interest rates and when BNPL apps came along you could finally buy a $650 laptop for $650 instead of $1,500. They were a game changer and all those rent to own businesses closed down.
That is very interesting to learn more about their genesis. Thank you for sharing that.
virtually in some cases it hardly matters
My gosh! Thank you thank you. I knew there had to be a catch! I am always on time. Like the song...
Very well explained, Preet. Thanks.
Thank you!
Amazing detail in this video. Thank you so much!