What is your relationship with BNPL

[Noctosphere]

Affirm, Klarna, AfterPay, there many companies now that offer this service : Buy Now, Pay Later.
With high interest rate, it's often less advantageous to buy something with this instead of a regular credit card. And yet, many of us still use them.
I saw many cases online of people going so deep in debt with all these BNPL companies, it's scary.
I wanted to know what your relationship was with these companies. Do you use them? What was your experience with them? Are you avoiding them?

Spoiler: My personnal experience

I have a credit card I use for my daily life. I usually prefer to not use it for extra-expensive stuff, since I rarely pay my balance completly every month. I don't go in debt too much. It's actually something that scares me. I don't restrain myself either though. If I want to go to Tim's, then I go to Tim's. If I want to buy to my cat some new toys, then I buy her some new toys. My credit card limit is around 1000$, so while I don't clear it up every month, I don't want to raise it either.
And that's when I started to use Affirm for some expensive stuff. So far, I've bought 6 items with it. First, my 55" TV, which I only paid every monthly payment. Then, I bought a cat tree and a stainless steel litter for Nova, and that's when I noticed the option that allows me to make bigger payment and thus, shorten the lenght of the loan and lower the total of interest I'd pay. I usually take the longest period of time for the loan (lower monthly payment, but higher interest in the end), so that I can have some free of mind and make bigger payment whenever I can.
So, for the cat tree+stainless steel litter combo, I had a 6 months loan, and ended up clearing it in 2 months. Few months later, I did the same again with my VR headset, took a 18-months plan, cleared it up in 4 months. And then, it was turn for my GPU. I took a look at my whole plan recently, had a 24-months plan and cleared it 8 months. GPU was 850$, interest would have been about 250$, for a total of 1100$, but since I cleared it faster, I only paid 80$ of interest.
Personally, I prefer to not have too many plans at the same time and not get dragged in a spiral of hell. One big toy at a time, I would say. I had hesitation on getting a Switch 2 with this too, but changed my mind since the price is so high and the list of games I'd want on it is so short. Maybe in a year or two? Or maybe I'll just wait for emulation?
Anyway, that's my experience with Affirm. What's yours?

 

[Scarlet]

It's one of those things that isn't terrible on paper if you understand what you're spending and have the money for the payments. Given pretty much all of these BNPL schemes are interest free if you pay on time, they caaaaaaaaan be fine. But the reality is that they push people to spend beyond their means and end up in debt.

 

[Noctosphere]

It's one of those things that isn't terrible on paper if you understand what you're spending and have the money for the payments. Given pretty much all of these BNPL schemes are interest free if you pay on time, they caaaaaaaaan be fine. But the reality is that they push people to spend beyond their means and end up in debt.

Just to be clear, what do you mean by "interest free if you pay on time"? As in "If I clear the whole bill before the first payment"?

 

[Scarlet]

Just to be clear, what do you mean by "interest free if you pay on time"? As in "If I clear the whole bill before the first payment"?

No, if you meet the payment schedule. I'm talking about Klarna, PayPal Pay in Three etc. Other forms of credit like credit cards and paying over longer periods do typically incur interest rates as standard though.

 

[Noctosphere]

No, if you meet the payment schedule. I'm talking about Klarna, PayPal Pay in Three etc. Other forms of credit like credit cards and paying over longer periods do typically incur interest rates as standard though.

Well, aboit a year ago, I changed of cellphone service provider and got a new cellphone with them. I'm paying it with Affirm over 2 years with 0% interest. But I guess that's the only case you can get these offer, right? When you get a loan through another company.

 

[Scarlet]

Well, aboit a year ago, I changed of cellphone service provider and got a new cellphone with them. I'm paying it with Affirm over 2 years with 0% interest. But I guess that's the only case you can get these offer, right? When you get a loan through another company.

I don't know what you're asking here. A lot of places do interest free loans over a set period of time. I assume they make money on people who miss payments and go beyond the set payment plan, where interest starts being charged.

 

[SaberLilly]

my relationship with them is none. i either pay for it all at once or save until i can.

 

[The Catboy]

Tried them in the past, and ended up paying more over time with them or always having to pay when times were inconvenient.

 

[Noctosphere]

Tried them in the past, and ended up paying more over time with them or always having to pay when times were inconvenient.

Well, ending up paying more over time is the concept of interest, isn't it?
In my experience, if you can make a bigger payment, do it, so that you pay less interest and clear the whole thing faster.

my relationship with them is none. i either pay for it all at once or save until i can.

I can totally understand your point of "saving until you can" but sometime (if not all the time), unexpected bills pop up and you have to take the money from the saving you had, which delays your purchase even more.
This is my way of thinking with this, if you can afford the monthly payment on a regular basis, but not the whole thing right now, then do it. But if you can make a bigger payment later, do it, don't wait for the bill to just clear itself over time.
My way of thinking is also, no more than one big toy at the time.
My gpu, for example, was 850$ and I made a 200$ payment for the first month. And whenever there were softer periods of time, where I had less expense, I would make bigger payment on it.

 

[namename11]

They're useful if you plan your purchases right, but let's be real, most people using BNPL are not that financially savvy. The marketing is geared towards financially vulnerable groups [like young adults] who probably aren't thinking everything through when buying shit.

Just like with other forms of debt, the marketing needs stricter regulation but good luck with that.

 

[Noctosphere]

They're useful if you plan your purchases right, but let's be real, most people using BNPL are not that financially savvy. The marketing is geared towards financially vulnerable groups [like young adults] who probably aren't thinking everything through when buying shit.

Of course, if you buy everything with BNPL and end up with 500$+ monthly payment, that's on you.

Just like with other forms of debt, the marketing needs stricter regulation but good luck with that.

Well, technically, they aren't lying, you know? I can't even see how some people (even younger adult) can even think that they can get their stuff for free (there are people who really think that's how it works, sadly). The bigger problem, i would say, is that these companies standards to validate a loan are much much lower than bank's, which also means their interest rates are much higher. But since their standards are much lower, it also means they grant loan to some people way beyond their ability to refund it. That's tricky, but that's also a problem from the client side. Don't ask for loan for stuff you don't need if you can't even afford basic needs (food, rent, power, etc.).

 

[namename11]

Of course, if you buy everything with BNPL and end up with 500$+ monthly payment, that's on you.

People using BNPL probably aren't bothering to count, so it's easier to spend beyond your means.

Well, technically, they aren't lying, you know? I can't even see how some people (even younger adult) can even think that they can get their stuff for free (there are people who really think that's how it works, sadly). The bigger problem, i would say, is that these companies standards to validate a loan are much much lower than bank's, which also means their interest rates are much higher. But since their standards are much lower, it also means they grant loan to some people way beyond their ability to refund it. That's tricky, but that's also a problem from the client side. Don't ask for loan for stuff you don't need if you can't even afford basic needs (food, rent, power, etc.).

Tobacco companies weren't lying either when they used to say "most doctors use X brand". It's not the same as saying doctors consider it healthy, but it all but implies that. At least to most people. BNPL providers use influencers and celebrities to advertise their services and cultivate trust. I have heard of the payable amount snowballing into multiples of the base amount, so that's pretty scummy. It's not illegal but pretty unethical, taking advantage of the vulnerable.

 

[K3Nv4]

People go in debt because they spend more on these apps than they can actually afford so it's their own fault and why people can't manage themselves enough to keep a roof over their heads. Already have the money in the bank for what item you want then use these apps giving you time to save more. I've used klarna, after pay and zip had little issues. I just don't over spend on things I don't need.

 

[VinsCool]

Credit cards are already troublesome enough so nope I would rather avoid them entirely.

 

[K3Nv4]

Credit cards are already troublesome enough so nope I would rather avoid them entirely.

To be clear it's not signing up for a credit card, they create you a digital card then every two weeks you make a payment with 4 to 6 biweekly payments so if item is $200 every payment would be like $50 until it's paid off. Bit clever if you don't want every website having you real card numbers. Even Amazon gets hacked every so often.

 

[impeeza]

Affirm, Klarna, AfterPay, there many companies now that offer this service : Buy Now, Pay Later.
With high interest rate, it's often less advantageous to buy something with this instead of a regular credit card. And yet, many of us still use them.
I saw many cases online of people going so deep in debt with all these BNPL companies, it's scary.
I wanted to know what your relationship was with these companies. Do you use them? What was your experience with them? Are you avoiding them?

Spoiler: My personnal experience

I have a credit card I use for my daily life. I usually prefer to not use it for extra-expensive stuff, since I rarely pay my balance completly every month. I don't go in debt too much. It's actually something that scares me. I don't restrain myself either though. If I want to go to Tim's, then I go to Tim's. If I want to buy to my cat some new toys, then I buy her some new toys. My credit card limit is around 1000$, so while I don't clear it up every month, I don't want to raise it either.
And that's when I started to use Affirm for some expensive stuff. So far, I've bought 6 items with it. First, my 55" TV, which I only paid every monthly payment. Then, I bought a cat tree and a stainless steel litter for Nova, and that's when I noticed the option that allows me to make bigger payment and thus, shorten the lenght of the loan and lower the total of interest I'd pay. I usually take the longest period of time for the loan (lower monthly payment, but higher interest in the end), so that I can have some free of mind and make bigger payment whenever I can.
So, for the cat tree+stainless steel litter combo, I had a 6 months loan, and ended up clearing it in 2 months. Few months later, I did the same again with my VR headset, took a 18-months plan, cleared it up in 4 months. And then, it was turn for my GPU. I took a look at my whole plan recently, had a 24-months plan and cleared it 8 months. GPU was 850$, interest would have been about 250$, for a total of 1100$, but since I cleared it faster, I only paid 80$ of interest.
Personally, I prefer to not have too many plans at the same time and not get dragged in a spiral of hell. One big toy at a time, I would say. I had hesitation on getting a Switch 2 with this too, but changed my mind since the price is so high and the list of games I'd want on it is so short. Maybe in a year or two? Or maybe I'll just wait for emulation?
Anyway, that's my experience with Affirm. What's yours?

LOOK MY SIGNATURE

 

[VinsCool]

To be clear it's not signing up for a credit card, they create you a digital card then every two weeks you make a payment with 4 weeks so every payment would be like $50 until it's paid off. Bit clever if you don't want every website having you real card numbers. Even Amazon gets hacked every so often.

Sure that sounds useful, I was just saying that having that on top of a credit card would be foolish, so personally I am not interested.
My bank has been pretty spammy over phone lately just because my credit card is full and I could barely pay a tiny bit every month so I certainly don't need more to worry about lol

 

[K3Nv4]

Sure that sounds useful, I was just saying that having that on top of a credit card would be foolish, so personally I am not interested.
My bank has been pretty spammy over phone lately just because my credit card is full and I could barely pay a tiny bit every month so I certainly don't need more to worry about lol

Yeah it can be but it's better imo I've had profiles hacked into and someone even used my cc to try buying a $500 saw before on ebay and such. Some items I just split payments into because I'm a cheap fuck and don't like paying full price rather do it later.

 

[Skv0ra]

Affirm, Klarna, AfterPay, there many companies now that offer this service : Buy Now, Pay Later.
With high interest rate, it's often less advantageous to buy something with this instead of a regular credit card. And yet, many of us still use them.
I saw many cases online of people going so deep in debt with all these BNPL companies, it's scary.
I wanted to know what your relationship was with these companies. Do you use them? What was your experience with them? Are you avoiding them?

No relationship. Pay in 4 is the only thing I fucks with via PP. If you miss one, they'll remind you, but won't immediately hound you and there is not interest in the terms afaik.