Is Buy Now, Pay Later A Good Idea For Consumers?
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- Опубликовано: 18 ноя 2021
- Consumers have flocked to “buy now, pay later” businesses in recent years as a way to make big purchases more manageable. In fact, these new services have become big competition for traditional store credit cards. Their rapid growth is raising questions about the benefits and risks for consumers, as well as the lack of regulation.
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Is Buy Now, Pay Later A Good Idea For Consumers?
If you're using financing to pay for your clothes, you should probably buy cheaper clothes
Or just way fewer, but better clothes.
Same thing with cars, furniture, phones etc....
Thrift shop has some really nice clothes. 😁
Yeah we used affirm for a mattress because it was $1,500 and interest free. Something that will far outlive the length of our payment plan.
If you need financing to pay for clothes, your employer is taking advantage. of your labor and isn't paying employees enough. Has nothing to do with having to buy cheaper clothes. Ever heard of Walmart's layaway?
Save now and buy it later - do this. Don't buy now pay later unless its an emergency and you've exhausted all other options.
Exactly! But no one has an emergency for a consumer good!
Consumers want the product now lol
and hope it goes on sale by the time your buying.
I couldn't agree more. If the Coronavirus hasn't scared us into getting rid of our debt and saving more, however, nothing will. My wife and I make very good money and our retirement money is set. However, we had too much credit card debt and no savings. When the pandemic hit, we decided to pay off our debt and save that "3-6 months they always tell you to". My friend, who's super duper conservative when it comes to taking on debt, slept on the floor for an entire year rather than buy bedroom furniture on credit. It's easier to sleep at night when the debt collector isn't calling you.
@@dontbanmebrodontbanme5403 you can buy an bed for like 20-30 euros at a second hand store, why the hell sleep on the ground?
5 yrs from now:
Breaking News: BNPL companies knew that consumers could not repay later, whistler blower to testify in front of Congress.
and company changes their name into meta pay
And only testifying in meta court.
Lol exactly what's going to happen. "The algorithms were preying on the poor who they knew couldn't pay"
The goal is to get "too big to fail" in those five years.
@@grae_n companies are only too big to fail if they have major contracts with the government
Ah yes, why 90% of Americans are in debt.
And why Americans per capita consume 3.5 more than the Chinese, despite the latter being the factory of the world
Seeing you on non league channels commentating too, makes you realize how small the world has become thanks to internet!
Hopping over to watch your latest vid. Take care and keep up the great work for the league community.
Actually about 98% of the money in existence is debt
@@TomNook. because the median income in China is about $5k?
there would be no money if thee is no debt, youtube : money as debt
BNPL is another way to buy things you cannot afford and stay in debt.
And just for garbage.
Worse.. easy credit is a vehicle used to advance inflation. You want to know why houses are so expensive? Where did all the 15% mortgage loans go?
Well that sad becuase China wrecked and defeated you already
Yup... until they are dead
💯
can’t wait to see the consumer debt crisis that arises from the proliferation of these platforms
Exactly what I was thinking. People will just buy even more things thinking ehhh ill just pay it piecemeal over a couple weeks forgetting that those piecemeal purchases add up when it comes time to make weekly/monthly payments.
With basic regulations you can prevent that, also some platforms like zip are harder to make purchases as i have heard from users of BNPL's and there is millions in debt currently in countries that have adopted it already, also people need to watchout how much it impacts your credit score, but with the adoption and regulations its safe and easy and works for alot of peoples lifestyles, will be here to stay.
These businesses always find a loop hole .. and this evolve around lending
As if this already didn’t exist with credit cards… most people are already in credit card and car debt and shouldn’t be spending all of this money in the first place. Same as opening another credit card they shouldn’t have…
@@dynamichunter843 well it might surprise you but credit cards is a typical US thing.
“If you buy things you do not need, soon you will have to sell things you need.” -Warren Buffett
Sounds like a smart guy. Hope he makes it big someday.
@@dtiff he gets massive tax breaks and bribes politicians
@@austinhernandez2716 And you complain all day about other people's achievements.
@@austinhernandez2716 says who? you?
Exactly
If you can't afford it outright, don't buy it. That's what I was always taught.
And it's a horrible advise that you have been told
@@dreamzbg9477 how so ? I stand with her.
@@HarpaxA debt is not inherently bad or good, it depends how its used. It's like saying knifes are evil don't use them although they can be great tools or deadly weapons. It's a matter of education and knowing the risks
@@dreamzbg9477 if you take a loan for things that generate further money, it can be good.
But the debt in this context is purely for consumption, in particular things that one can't normally afford (hence imo should be avoided)
Tell that to doctors and lawyers with school debts lmao
"Buy now pay later" is just re-branded credit. Hearing about this so late in the stock market cycle (the peak) reminds me of the Paycheck Advance stores that popped up all over American before the last crash. The social engineers and financiers are feasting on the working poor. Many who use these services likely have already maxed out their credit cards. Rest assured when the market does crash people will say, "where did the money go" and "what went wrong?"
Yep. It's the worst kind of capitalism, exploitation capitalism.
@@pvanukoff there is no interest. So no it’s not exploitative lol. Why is your financial irresponsibility exploitation?
@@Tounguepunchfartbox If it's really interest free, that's great, and no, that would not be exploitative. My experience and knowledge of things like this is that they are usually high-interest and charge high fees if you make late payments. That's the exploitation capitalism I'm referring to.
@@pvanukoff nope there is no interest lol. I’m sorry but debt isn’t a bad thing. Leveraging debt is the best tool you can use to become wealthy. Not anyone else’s fault if you’re too dumb to do that.
Exactly my thoughts, people have not learned from 2008 and are becoming more stupid. That's why things are only gonna get worse.
If you need to get in debt for 24 months to buy an iPhone 13 Pro, then maybe you shouldn't.
Nah need that iphone 13 pro to flex and drop it! Then can't repair it 🤣🤣🤣. Being sarcastic. Totally agree. And by the time they pay off that debt. Iphone 15, is out lol. And the interest would be u paying 300-600 bucks more.
That's not how these work though... That's how traditional credit would work... Here you'd have to pay 25% upfront and whole thing in 2 months or default...
@@carlosk8103 but you're wrong.
I am paying zero interest on my Iphone 12 , 24 installments
No one needs to go into debt for a phone, but with Apple’s credit card (which I assume your referring to), there is no interest for those 24 mos. It entices those who have income stability and doesn’t want to pay a lump sum upfront (while taking out the friction of upgrading), but of course, also attracts those who are buying a phone that is beyond their means.
I use payment plans for mid-sized purchases occasionally. For example, I used Amazon's payment plan (5 months) for my laptop because I needed one right away and didn't want to pay interest by purchasing on a credit card. I wouldn't use this option often, but it's helpful for certain situations.
The thing is now you can do this at places like h&m...and no one needs to buy so many clothing that splitting payment becomes necessary. This practice is shady and pushes people to buy more than they can afford.
@@alwachart I think that is the real problem. If you cant pay cash for larger purchases like a laptop or something that you need that is one thing but it appears to me that most ppl are using these services for things that are unnecessary like clothes and other non necessary items.
You used it for your need. But these days everyone just keeps buying stuffs and some don't understand difference between need and want. If we think what we want is all necessary things then we will land up spending money that we don't have, leading to excess debt. As consumers we really need to evaluate our spending habits and sometimes pay later or installments really help us.
ARMYYYYY 💜💜💜 ! If concerts and albums had buy now pay later🥺🥺
Why can't you use debit card
They change them in the way that even more people are buying things actually can‘t afford.
y should elon and jeff family have all fun? this is USA all use USD print baby print.
That's exactly how a "bubble" is formed. Give it a few years and it'll pop. But until then, affirm, klarna and others are ROLLING in dough. Lol
If these companies are making money hand over fist because ppl keep using BNPL, i need to buy up some of their stocks LOL.
@@Miked1332 When the bubble burst the Gov will bail out the corporations but regular folks will be left in the dust.
remember kids debt free life is real freedom. the moment you take a loan you roll down the rabbit hole and most of them dont come out throughout their lifetime. consume less and be satisfied with what you can afford.
So dry ramen it is.
Does this include a mortgage? Because if we said literally any loan is bad then no one would own a home.
@@mastersnet18 Inflation-adjusted real estate prices are over 50k$ higher than during the peak of the mid-2000s financial bubble. We're won't be able to own houses anyways because prices will either be insanely high forever or there will be a massive crash that wipes out our savings.
Remember kids, just because some people can't handle debt, doesn't mean all people can't handle debt. I don't prescribe to the debt free your whole life mentality, like most financial professionals. However, if you lack willpower, than debt free is definitely the way to go. Most do lack willpower, so I agree with you - debt free for most people is the best option. I am just glad I use other people's money like most successful businesses and like most wealthy people. Good luck!
@@vaderwashere365 using other people’s money is like playing a game. You aren’t certain you will gain from that. It’s likely you will lose money.
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She helped me recover what I lost trying to trade my self
I think that she is the best broker I ever seen
Thanks for introducing me to Mrs Sonia
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These tricks.. including credit cards.. are exactly the the reason why people are in such extreme debt.
Platforms, firms thrive on such irresponsible behaviour
Don't forget student loans lol. That's where 90% of my debt is at.
What “tricks”?
The crefit card terms are straight forward. You’re either completely financially illiterate or lack basic discipline to end up in extreme debt.
credit cards are great for ease of purchase.
Pay wave, and online purchases.
Having self control to only spend what's in your savings account is the trick.
Never spend money you haven't already got.
Its the people who are stupid not the company the company might be the bad guy the first time but who is in the wrong when they come back the second time
Well, there’s also people in the game of credit cards. Grabbing points and cash back for their spendings. Of course these people pay off the cards every month and carry zero balance the next month
They forgot to mention what’s really fueling the need for these services: Consumerism, materialism, greed, and superficiality, lack of delayed gratification, and lack of purpose, lack of gratitude. Of course there will be the 1/10,000 who used this to get a computer to start a new company, but most of this is just going to be consumer debt. The bubbles will pop eventually and everyone will cry “I was taken advantage of by these companies” whilst the companies cry “we didn’t know they couldn’t afford this.” Companies will get bailouts and nobody will learn a lesson to prevent it from happening again.
2 years later and the interest rate went up. Turns out having the fed rate near 0 was causing all sorts of debt bubbles
Dave Ramsey will be getting more calls after this…
Twenty years ago, Korea issued credit cards to most people unconditionally, including teens. At that time, so many people who overspent became credit defaulters.
I have a friend who can relate to that story
Then squid games were organized. 😁
Don’t get trapped in this debt cycle. Only buy with the money you have unless it’s a large purchase like a home or a car.
You buy a home or a car because you have no choice
I use BNPL every month. I pay it off over a month or two. You can use these things if your responsible. If your not then don’t.
@@shasmi93 but you end up paying more than you have before though if you paid in full. Making the amount of times you have to pay to be extended. Like 2 or more years when paying it in original price would just be a year.
BNPL encourages customers to buy stuff they cannot afford dragging them into more debt
And Combine that with planned obsolesce🤯
And that's exactly where (many, not all) capitalists want their consumers to be. Forever indebted. It's literally free money for them.
@@pvanukoff 😂 I guess consumer choice and responsibility doesn't exist?
@@edenk3500 👀I reviewed my comment thoroughly and couldn't find where I said anything about consumer choice or responsibility existing or not existing. Of course consumer choice and responsibility exist. That doesn't change the veracity of what I wrote.
Just look at credit card debt for any indication.
If you can’t pay for small purchases…you can’t afford it.
"Buy now, pay later" was what I used to tell shop owners before smartphones were around, and now I'm in my 15th year in prison.
It's sickening that you were punished just
for being an early adopter of this trend.
Wait...how do you have access to the internet from prison. And 15 years? Damn, bro. What did you do? 😂🤣😂🤣😂🤣
@@dontbanmebrodontbanme5403maybe he's in one of those fancy Nordic prisons
"77% of respondents told us that buy now pay later actually helps them to spread out the cost of purchases and helps them to better manage their finances"
Ah yes, spending money you don't have is a great personal finance management practice...
right did these ppl not process their words before letting them spew out of their mouths'?
@@sidehustlevikki1066 same way they spent their money. They didn't process before it spewed out.
I imagine for a person with nothing, maybe all they have is a construction job, being able to pay for work clothes in increments is a big help.
But americans must use credit cards right? for their purchases? In europe most users have debit cards? or am i wrong?
Fantastic. More easy credit so that everyone is under more debt.
Giving people access tp credit isn't bad. But we all know how easy it is to rack up those numbers.
Giving people more financial freedom on when they want to pay allows people more freedom to either improve their lives or completely wreck it. With freedom comes responsibility.
The super rich often use debt to their advantage. They can borrow millions of dollars at low interest rate to buy property that increases faster than the interest rate, therefore making free money. Normal people should learn to use debt to their advantage instead of being used by debt. If we don't trust ourselves to use debt correctly, they we need to be smart enough to steer clear.
Affirm is one of the only lenders who charge no additional interest for failure to repay.
As a Brazilian it's funny how BNPL is only now becoming a thing in Europe and US, when here in Brazil it's been widely used for decades (for buying pretty much anything, from clothes to home appliances). It is not all roses though, as explained in the video, since credit card interest rates here are as high as 15% per month, which translates into more than 400% per year!
It all started in the 50's with the "crediários" and it's common for Brazilians pay many things in installments. Recently even Chinese marketplace Aliexpress allows Brazillians pay with their credit cards in up to six installments with no interest or taxes. It seems that this time we've been ahead of the rest of the world because if you pay for it in due time there are no late fees as it is with BNPL
BNPL has always been in Europe and America
my thought exactly hahaha, Brazil is way ahead of its time
Wow you're ahead in poor consumer behavior lol
Yes the parcelamento. Good thing to allow people to buy essential goods but also a way for increasing debt with non essential items.
When fintech charges bnpl fees to stores, prices rise, hurting ordinary buyers.
Credit card companies have strict rules that forbid sellers to increase the prices of goods that are bought by credit cards. I’m sure BNPL companies will adopt a similar measure.
@@sylvianblade75 I think they’ve already started this. They probably position themselves as being worth it because it drives more impulse buying
Ask yourself "If I bought it outright, would it just cripple my finances?". Asking that helps make the call when buying something large. Do not fall for financing everything
Always count your total cash minus total debt expected
if u were going to buy it anyway and ur getting 0% interest why bother? I'd rather use the extra money to go invest it and get 9% return while this isnt charging me interest.
These attack the ability of the working class to climb out of poverty.
It used to be called "Hire Purchase", and people were kept in penury with its high fees and interest rates.
Keep the proles forever in debt
Maybe they shouldn’t be so stupid and buy them ?
@@ihmpall I think that's the idea: Educate working class people so they don't fall for this stuff. But, that would threaten profits for the wealthy investors and corporate executives. Can't have that, can we.
@@Who-vt9oh we live in the Age of Information. Folks have the ability to learn about ANYTHING they want to. I come from a lower class background, but taught myself how to do digital arts by watching RUclips videos and reading tons of articles on freelancing and business.
For the passed 12 years I've ran a graphic design business and now am teaching myself about the stock market, financial literacy, generational wealth, and real estate.
Too many excuses for why people make dumb decisions and stay enslaved financially.
I disagree. The super rich use debt to their advantage. They can borrow millions of dollars at low interest rate to buy property that increases faster than the interest rate, therefore making free money. Why can't normal people use debt to their advantage too?
I believe debt can be used by the working class to climb out of poverty if used correctly. Let's say you wanted to buy something to sell for a 100% profit, but you don't have the money. Taking debt at 0% interest for huge returns on $0 investment is just being smart. It's like free money!
We gotta stop being unintelligent with debt. We should only use it to our advantage.
These schemes of payments like, Interest free installment payment and buy now pay later; have been an staple in latinamerican households for decades, sometimes as the only way for families to get durable goods. The very fact that this is just becoming a trend in the US is an innequivocal sign of the rising inequality happening there.
nah its a sign that americans are trying to live above their means bc unlike the culture you come from americans are using this for things they want rather than need.
Leftism is a mental illness
Companies look at ways to continuously grow even though it’s not sustainable (outsource to China, just in time shipping, financing customer purchases) Consumers look at ways to afford goods since wages have been stagnant for so long which now includes BNPL for an easier debt to apply for. Going to all be bad in the future. Kicking the can down the road.
Especially when the government are doing the same thing
Going to go bad on a huge scale
I live in Germany and I was shocked to hear the 19% number. The German people are terrified of debt to the point where many people are not interested in homeownership because they're scared of having a mortgage. Also it's not as common for people to have credit cards here, which may be why these services have taken off so much.
I am from Germany and I use the pay in 30 days option from Paypal (you still pay the full amount at once just 30 days later) quite frequently. Not because I can not afford the item, but because it is effectively a free loan. I do not know how other people use it,. I still keep track of my spending and am aware of how much I can afford, but I can see how less educated or aware people could loose track and overspend.
the way these services work is like a fail safe so you dont get poteniacly scammed. its a get now pay after thing. you still need to afford the product without loans.
Renting for life is also not a good option
It's called "Buy Now, Pay More Interest Than Principal Later"
You missed the part where almost all of these companies don't charge any interest if paid as agreed 🥴
Seriously people, if you can't pay it in cash then you can't afford it. Is it that hard to understand that taking debt is never a good idea in the long run?
I was raised to save up first and then buy. Besides a mortgage everything else is saved up first. This is just a financial trap for people with lower incomes or dumb people who just buy stuff they don't need. And interest-free loans do not exist. Someone has to make money out of this and you pay for it somehow. Always. There is no free money.
Of course. If you don’t pay the full amount within the terms laid out with BNPL, you pay a lot of interest usually from the date of purchase.
@@KevinContreras2013 even within the terms you pay for the credit. These companies do not loan free money. I don't know exactly what their revenue stream is but they will make money of every bnpl transaction. This CEO in the video was not a Samaritan, he's just a gready entrepreneur. Probably prices of goods are simply heightened and we all pay for this.
I’m sure it’s similar to credit cards. There is a high interest for if you don’t pay it off in the given time, late fees, and the merchants also pay for the service probably through transaction fees.
@@michielshub they make deals with company’s like Amazon and such. Product A costs 100,- at amazon, you pay thru BNPL. But BNPL has a deal that they get 10% off with Amazon on all products, so it cost them 90 bucks. Amazon gets paid straight away and makes extra sales (because otherwise the customer can’t afford it) the BNPL makes 10 bucks when you make all your correct payments.
Now comes the fun part: hey that was easy, so in small increments you go on a shopping spree, and before you know it your in way over your head. Then the high interest come, another big income for the BNPL company’s. In the long term it’s a win/win situation. Or rather it’s a win/win/lose situation, and guess who’s gonna be the loser?
@@michielshub they make it from the fees charged to the business. If they can get interest from people then it’s just icing on the top.
This is like eating seeds instead of planting crops and waiting for them to grow. And it's being presented as a good thing.
BNPL firms, Credit Card firms, banks.. THRIVE on irresponsible behaviour.. they incentivise extravagant spending
Idk I feel like these are good. Especially if it might be in a emergency or you just want to budget yourself. I use klarna and I’ve never been in debt or been late on any of my purchases and always paid it off on or before the last 4th payment. I honestly find it so convenient
But then why not just pay upfront? I get emergencies, but emergencies should be rare.
@@Soff1859 maybe they don’t have the money upfront that’s why they choose to pay in cycles
@@worldofcc8918 yeah of course. The question is for what. If you cant pay upfront for the consumer electronics and clothes you want, then you should buy cheaper ones. Not buy them on credit.
Same if you cant afford the nice car or rent for the big apartment you'd like. Those arent emergencies.
However if you cant afford to buy your essential medicine or bread, then obviously getting a loan is better than starving. But i doubt its about avoiding starvation for most people who use these services ;)
I find it more convenient to pay cash
If you can’t afford it right now then don’t buy it, I don’t get why people don’t understand it.🤦
But I have to keep up with the Jones'
Sometimes, it's necessary. Say if i need a laptop because my old one has died, i can't wait a year to buy it.
It depends on the situation...if it's an emergency purchase and the person doesn"t have enough money in their savings to cover it or maybe some people may have the funds in savings but decide to borrow instead because it's large purchase, they don't want to interfere with their savings so they borrow and pay it off within a few months eg. A vacation
@@mdzaid5925 and during that year that one had the old laptop one could not even save up a few hundred dollars for an emergency fund? And be able to buy a new laptop as an emergency purchase without going into debt
@@dominick6131 Even if one does have an emergency fund, i think not having a laptop is not an emergency which requires us to blow up our emergency fund. And these days a decent laptop costs atleast 1000-1200$, good one's even more. Not sure about your country, but in India, we can get No-Cost emi from amazon pay later & various credit card for 6 months - 24months (depending on product) and this seems to be a much better option than to blow up my emergency fund.
This is dangerous, I’m good.
Honestly if you know your gonna have the money for it then it’s a good idea. I’m always using the 4 payment plans cause I know every 2 weeks I get my check and works perfectly for me
RIP when your check isn't checking you.
If this is your way of not having to access your plentiful emergency funds and not having to liquify any of your investments, then there might not be anything wrong with it. But if you're buying things that you couldnt very easily just pay cash right now, then its gonna bite you in the ass somewhere down to road...
Debit cards don't have as many consumer protections as credit cards. Use a credit card, only buy what you can afford & pay it off every month in full.
I basically only use credit card, but I always keep a credit balance on it.
I started by ovrrpaying my cc bill. Say my cc bill was $500 I paid $ 600
Nowadays my cc is partbof my emergency fund and also works like a debit card.
@@Rodrigo_Gatti wow. Most won’t let you pay more then you owe. Non of mine allow it. Can’t even pay for pending transactions cause of this.
Could you use some examples
@@Rodrigo_Gatti I get what you’re doing, but I would never give the CC company my money to hold. I simply autopay the statement balance every month. No need to pay extra or make things complicated.
@@xtrey19x to each his own, i don't keep a huge credit balance
About 1 month worth of expenses. Leaving in a savings account thay pays 0.5% a year in interest and leaving on the cc thay pays 0 in my situation is basically the same. I even keep a credit on my utility bills. In case I ever get in bad shape it will have one extra month with lights on. Again not with a lot of money. Its just part of my emergency fund, but good to see this from other points of view. Cheers
I usually shop with Klarna when I know I'll have to return part of my order. Rather than waiting up to 14 days for a refund, I just subtract the difference.
But also, as a student with a small income, I prefer a credit card with 0% financing which makes it easier to purchase things that are necessary like a new laptop. I could perhaps afford a cheaper alternative outright but regret it not long after because it doesn't perform as well as I need it to. It's much easier to buy it nice rather than multiple times because I couldn't afford the better option which is often more expensive.
Klarna interest rates are much too high even by German standards.
I agree. That's why I financed my laptop with Amazon. It will be paid off in 5 months and with no interest. I didn't have time to wait to save up for one, and I didn't want to buy a crappy one and regret it later. It made sense for me.
I think it's a good business model, they have a lot of similar revenue potential to credit cards, but are more secure (no physical card or card # to steal) and have lower costs (no need to mail physical cards, statements etc)
I peronally think it is worse bc its not reported to the credit beauru and Im willing to bet lots of buy now pay later users are ppl who have low credit scores and this is an easy way to get access to funds they do not have.
I wish they had spent some time explaining how BNPL companies make their money. That's my biggest question.
Late fees from consumers and they charge the vendor a fee for their services so consumers spend more than they would without the payment plans.
Interest.
@@1Letter23Numbers. thank you.
SO they still charge merchant fees?
So this is just a way to drum up more demand than what they would otherwise get.
Get the suckers already in hock with personal, auto loans, mortgage, and credit cards... buy now, pay later. It'll be on the backs of these parasites who will sell this debt to a collector.
Interesting how the financial scams get more vicious as time goes on.
I love that companies offer short term payment plans with no interest
My teacher once said "never go into debt for consumption products because what you want will never end, but get into debt only if you're gonna get more money out of it e.g business and education"
In other words, getting people in more debt 💸.
Wow, it really shows how desperate retailers / merchant to grow sales that they are willing to take credit risks now.
I understand that for larger appliances like a stove, if your stove broke and it can't be fixed. I wouldn't do it for stuff you don't actually need though.
Pay later can be good if you use them wisely. My family taught me to use pay later only for productive items. Besides that, I never used them even if they offer a big promo.
I use it once a year. 90 days same as cash. New tires, stuff like that. Always pay off before 90 days
I used klarna and Quadpay very often. Sure I could had bought that pair of Jordan's for example at $200 dollars today,
But I like taking the same 200 dollars and stretching it for more items I might still need today. After buying the Jordan's as a X-mas gift I'm still at $150!
That $150 can buy me another item or I can just save it, it gives you options to do what you want with your money if you need to do your shopping today specifically.
In that case you can buy 2 pairs of Jordan's if for example you had 2 kids! With that same $200 you originally was going to spend for 1 you now stretched it to 2 items.
But spending $100 today for 2 pairs of sneakers at the total price of $400 and being able to bring it home the same day is awesome.
I won't even feel those 100 dollars coming outta my next 3 paycheck.
But I'm very responsible with my money management so I know how to spend my money responsiblely.
If I buy something I make sure that I can pay the cash in full, else I don't need it. The only exception was my house. Use credit card for points and cashback, not for credit with high interest. I've never paid a penny in interest!
Broke now broke later 😏. If you can’t buy it right away, you cannot afford it.
Just used one of these in South Africa to buy my bed. Im paying my last installment this month. Im happy with this feature. In SA its hard to qualify for a loan
There's nothing like a good night rest in a new bed. 😴
Can you cover why wages are so low?
@D Nutz Then can you tell me why productivity and wages have been directly related till the 70s. Modern workers and many times more productive than 50 years ago but real wages have been stagnant?
@D Nutz doesn't explain how factory jobs pay less real wages than they did in the 70s though.
@D Nutz I am referring to the economic detention of real wages.
I work on my car as a hobby and add performance parts. I’ll give my self a “budget” and use affirm and wait until one part is paid off to splurge on another one. If used correctly it can prevent exorbitant spending
Ethically I have concerns. But also, I used Affirm for my current gaming PC. It was expensive, and having the little cushion to help me along with payments was nice. Their user-experience and customer support is top tier. Whether what they do is "good" is a valid conversation, but whether they are performing well is an easy answer: yes.
The cushion is not going to help you if you lose your job. And by the time you paid it off you gaming pc is already outdated. So what then? Do it all over again? You also could have just saved up your money and then buy the PC. I’m really stunned how people just take a loan so easily. In my 35 years have I never ever took a loan or an payment plan. The only loan I’ll probably ever take is for an house and that’s it. And your here doing it for “fun” and something totally obsolete
@@Mark-vn7et that is extremely hyperbolic. Gaming PCs last years
If you can afford to spread a payment over a longer period of time with 0% interest it’s a smart decision because you can invest the difference
@@Mark-vn7et You want a cookie or something?
I did the same as him for a previous PC build in 2013. I didn’t decide to upgrade until now in 2021 when I make more than twice what I did back then. It was money well spent and I had a lot of fun with that old rigg. Stop being so pessimistic with your outlook on life. I bet you’re the fun guy at parties 😂. Yes I did put about half of this new pc build on a interest free card even thoughI could easily buy 50 of them in a snap of a finger 🤣. Free credit is a tool to those who know how to use it. Ask Elon and Bezo of they don’t use credit, especially interest free credit.
@@xtrey19x and yet you see so many people in financial problems with your 0% interest rate. I get your idea, but in the long run most people get irresponsible with their finances because of this. It starts small but in the end……….I’ve seen quitte a lot of people who are dead broke now but 10 years ago said the same as you guys.
Nothing is free in life. These company’s prey on people who think exactly like you but know a lot of people are going the default, and then the real money starts coming in for them.
@@Mark-vn7et pcs are outdated that fast. I have a 1080 in mine computer that I bought with affirm around 4 years ago and ti works just fine playing all games on high graphics.
If it isn't already obvious, repeatedly finding creative ways to boldly extend credit where no credit has gone before is clearly an implcit mandate in our financial institutions in order to meet embedded growth obligations. Our ruling class is at its wit's end.
Imagine walking around town and you own nothing your wearing not even your underwear because u owe money on it.
This kind of unregulated, will lend to anyone, loan companies remind me of payday lenders, who are notorious for giving loans to people who can't afford them with crazy fees and/or interest rates.
All businesses based on debt and interest are going to zero. This might seem unimaginable, but the business model is essentially unsustainable. It is like a blood sucker, at some point it is going to run out of blood when it kills its host. The most stark example at the moment is student loans, much of which could never be paid back.
Breaking payments is a pretty common practice in Brazil since always due to the country's high interest rates.
As Jaspreet at Minority Mindset says, broke now, broke later plans…
The problem occurs when people start to buy things that are more than their monthly income, mindlessly. If x is your monthly income and y is the product that you're buying using BNPL, y < x should be the condition under which BNPL companies should allow the transaction. (I would even say y < 0.75x would be ideal).
For people with y < x, BNPL is just a convenience feature. They can always choose to pay the whole amount since they have it at that point (which practically they won't do if x and y are very close if not for the existence of BNPL hence the y < 0.75x would make more sense).
This can be implemented by linking your bank account (checking/savings) with the BNPL companies to check your available balance. They may use companies like Plaid to do this too.
This way the company benefits from sales, BNPL takes a cut, and customers are restricted from making mindless purchases.
The idea of BNPL is incredibly beneficial to the economy, it's just the implementation that needs some thought.
Be Disciplined people... That's all.
Save up for that shiny thing you've been drooling over instead of doing Buy Now THINK later
If you don't have the money in the bank to buy it today then don't
Cars and houses are a different scenario but for small purchases, c'mon
I agree with everything you’re saying except the ending. This rule should INCLUDE cars! Don’t go into large amounts of debt on a DEPRECIATING asset. Your promising that your future dollars will go into something not worth what it is today
@@lahpetsoj I agree... When I said for cars I was referring to cash vs installment pay
Ofcourse even for cars you need to look at your wallet to see how much you can bear
You can use it responsibly. Use the 90 days same as cash.
I'm East African and I have never touched a credit card my 34yrs of living. Here we pay cash for everything. When u see an East African with a car it's paid for cash. Every house here is cash built and fully owned. Literary locals don't have any debt. That's our way.
I'm not saying we're better off because of that, but I somehow think it's how life deserve to be. U either afford something or not
Unless it's a house or a car ( maybe), I'll buy now with what I can pay now. I see so many future issues with this... 🤔
the way these services work is like a fail safe so you dont get poteniacly scammed. its a get now pay after thing. you still need to afford the product without loans.
I fell into this trap. Took out about 12 loans through Affirm. I paid them all off but it sucked having monthly payments for 6-12 months. Don’t do it
companies would rather do this than pay a livable wage when productivity is at an all time high.
It’s free debt ppl, use it as a tool to increase capital efficiency in your personal finances. You can mitigate risk by being liquid enough to cover the purchase outright.
Nothing is free in life. It’s a very dangerous thing your saying! Or do have magic mirror or something we’re you can look in the future?
@@Mark-vn7et It’s not “dangerous” when you actually have the money, but choose to do the payment plan instead. Let’s say you have $100 and you want to buy $50 in pants for work and going out. If the merchant offers you a interest free $10/mo payment plan then there’s no hard in taking the offer. Just make sure you have the income (a job) to pay off the debt and keep the remaining $90 as an emergency fund.
Except the bank reads it as very bad credit which can hurt you for a bank loan for things like a car or house. If you have the money there are better options
If you don't have the money.... Don't buy it.
Besides a house...
Well in fairness houses are the exception because you're not "spending" money per se, you're just turning it into assets since you can sell your equity (or the whole house if you paid it in full) later.
Even House does not make scence
it's a way to make you feel good about living above your means for however long the interest free period is good for.
I've never done the buy now pay later if I don't have cash to buy something I don't buy that's why it is very important to have a savings or an emergency fund I have one credit card and I have never carried a balance on it I saved for a new roof I saved for a furnace and air conditioning system
I still don't get how this is any different from credit cards, it's just a worse version of credit cards
the way these services work is like a fail safe so you dont get poteniacly scammed. its a get now pay after thing. you still need to afford the product without loans.
Well perfect way HOW TO NOT invest your money
Consumer debt is the worst debt
compared to a house or education you lose in the long run and fight a uphill battle against yourself
Actually student loan debt is the worst because its not bankruptable
You say that til the bank takes your house and car and your homeless.
I love bnpl services.
Obviously I'm not going to buy and go crazy and be irresponsible with it. I still only buy what I can afford. Like a $200 shelf. I see something I want but I feel guilty for dropping all that money up front. So id rather pay $50 and pay every two weeks for 4 payments and boom it's paid vs dropping that $200 all up front. It just makes it so much easier to do it that way. I'm not rich nor have aot of money but I do have enough to maybe buy stuff and there's things I need and want. So I just love that there's these services such as after pay and Klarna where I can pay a small portion and still habe money left over to buy other things I need and want. Just makes me feel less guilty dropping a large payment all at once.
In Mexico "buy now pay later" is know as "meses sin intereses" or "months without interest". It is extremely popular as people have the option of paying up to 24 months without interest. Because of this reason about 90% of the Mexican population from where I Iive is in crippling debt. It's sad seeing people become economic slaves, buying things they cannot afford. This concept is extremely dangerous and should not be practiced lest Americans end up the same. Or just don't buy things you can't afford up front.
The interest is built into the price
@@JogBird yup. They end up paying about double the real price
Thanks Paul but we are focused on the American buy now pay later not the Mexican one without interest. Stop pulling other countries in to make you feel better.
This has been happening for years in Turkey, and it's the worst thing that has happened
If you can’t afford to buy now and pay now you probably shouldn’t buy it.
I guess people are expecting to win the lottery later too.
This is becoming a self-fulfilling situation. Add to it exploits of price division by time and prices will not have to justify reductions.
It's like the opposite of layaway where people had the item put aside, paid then, over time with payme ts, and then got the item once it was paid for.
Well, it's certainly good for economy to have consumers commit to working their arses off in the future. But it's generally a stupid decision for consumer to take such debt. It's almost always unproductive debt on an item the consumer doesn't really even need right that moment. And almost definitely can't actually afford - otherwise they would have a different means to pay.
Also, think about it, what does it mean if banks don't give you credit and should you really be looking for alternative ways to get in debt if that's the case?
Credit is a fickle thing. It's one of those things where you doing right and everything but one time there was a major life changing event that was no fault of your own and next thing you know you have horrible credit. One missed payment is catastrophic to your credit no matter how much that payment is.
How is this better than credit cards
I use credit cards to build miles only. I try and pay off the balance every two weeks (on payday). Over the years I built enough miles for 3 First Class tickets to Europe on British Airways.
BNPL is the Loan Sharking/Check to Cash/Cash Pawn lenders for the middle class.
Basically you will spend your salary upfront and yoh spoil your financial future to become a new homeless
I love how CNBC is ignoring the fact they got caught with jury tampering and decided to cover other news LOL
I often use BNPL for purchases across a wide range of needs and wants. I always have the cash to pay for these items upfront but would rather make payments on the purchase to keep cash flow available.
American express is offering that deal also.
6 , 12, 18 ,24 months .
Check what your major credit card is offering before applying
And now I am starting to hear that corporations are being found to be raising prices and blaming inflation. Good times.
Inflation causes prices to increase. It's the reason why inflation sucks.
I mean, technically you could save some money with BNPL. Rather than paying $100 now, you can pay $100 in a month and make profit on that hundred dollars by investing it for example.. so long as you're not being charged interest. But yeah, if you're using BNPL because you can't afford the upfront price then it's a sham.
I’ve thought the same thing but I suspect the average BNPL customer isn’t tucking much away.
All short-term investment schemes that could get a profit worth bothering with on $100 qualify as gambling. Don't gamble with money that you cannot afford to lose.
This is exactly what I do to take a vacation with no interest or get car work done. I only do it for necessities or life experiences. Never to get new shoes or irrelevant items. Don’t Klarna a haul of fashion nova
The short term interest free from stores are really popular in Brazil for decades. It kind of shocked me the first time I went to the US that almost everything was upfront.
My dad has a 250 monthly ser aside for buying stuff for the house in split payments. Every time he finishes paying for something he buys something else.
Its great for me because i can buy and return the items in the time that the second payment comes. Allows me to realize what i need and dont need.
Now im 19 with 20k in savings
It's barely been a week since COP26 ended, when mass consumption of products needs to drastically go down. Every thing you buy will have created a huge chunk of pollutants in the air, land and water.
assuming you use them responsiably and actually make sure you can afford the month to month payments for the full length of time its a pretty good service. The issue is that its very easy to make a mistake and sink yourself financially at some point during the payment period.
"Only 3 easy payments of $75 with zero interest."
What could possible go wrong?
I see that option popping up all the time where I live (Germany) and never understood why would I ever use it. Like what is the benefit to buy now and pay Klarna in two weeks? Isnt that the purpose of a credit card? You put your expenses there and clear it once a month? To me it always seemed a scam. If you cannot afford it DO NOT BUY IT! (And yes there are exceptions like university -though thats free in Germany-, mortgages and other serious reasons). But getting credit to buy H&M clothes is insane.
I love this system. You can usually find sales where it is interest free. You just delay your payments at a later date. You do not need to wait and save up for purchase anymore, you can enjoy the product now.
Or you could just save money and buy it straight away. Your not suppose to save for something you want, you need to save your money so when you see an product you want you can buy it straight away. What will happen when something goes wrong in your life and you can’t make the payments anymore?
@@Mark-vn7et You will be screwed either way. I have mortgage payments and thus I have to have consistent income.
I will never ever feel sorry for Americans that got themselves into debt. Car loans, mortages, student loans, credit cards, etc. It’s stupid, and it’s impossible to feel sorry for stupid. The only debt I will feel sympathy for is medical debt. That sucks and for the most part it’s unfortunate. All other debt, pay it off and learn to not be stupid in the future.
I had money to buy tires for my motorcycle and bought em with Affirm instead, 3 weeks later I lowsided and needed to buy more parts. Glad I bought em with affirm.
Lol saw this for like papa johns. Imagine buying a pizza and still paying it off weeks later. God the world is going down the crapper.