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Is it socially responsible to offer credit cards? Buy now pay later seems essentially like an extension of these, just for one particular purchase. On the one h

Is it socially responsible to offer credit cards? Buy now pay later seems essentially like an extension of these, just for one particular purchase. On the one hand, these offers do induce many people to buy things they can't actually afford. But on the other hand, this would apply to credit cards and essentially any consumer credit product. My take is that people need better education. I listened to the planet money episode on buy now pay later, and apparently make people simply can't comprehend that 4 payments of $X adds up to 4x [1]. That's just bafflingly poor thinking ability, falling prey to consumer credit schemes is probably one of the smaller problems faced by people in such positions. 1. https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5ucHIub3JnLzUxMDI4OS9wb2RjYXN0LnhtbA/episode/NjYyYTk3ZGYtNmY1Ni00MDg4LWIzYjgtMTBhZDZkNDA4NTYy?ep=14 https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5ucHIub3J...

kolanos 4y ago
> people simply can't comprehend that 4 payments of $X adds up to 4x Are you implying that someone is paying four times what they normally would for a purchase with BNPL? Or are you saying that someone can't figure out that four payments of $25 is $100?
- Manuel_D 4y ago
  The link I posted said the latter, people didn't understand that 4 payments of $25 costs the same as $100.
- MandieD 4y ago
  Four payments of $25 might be instantly recognizable as $100, but quick, what are four payments of 37.74? If you aren’t good at mental math and are already primed to rationalize this impulse buy, your mind might go to “about $120” rather than “somewhat but not a lot less than $160” (or like us nerds, “37.5 is half of 75, which is half of 150, plus about .25 times 4 - $151!”) Their minds are probably more in the “oh, I can swing a bit more than $30 a month for a couple of months to get that sweet pair of sandals” place, though. And they’ve slotted the $28/month for the purse as “$20-something”.
airza 4y ago
I think it's pretty easy to conclude that offering credit cards isn't socially responsible. The company's revenue is maximized if they can identify and sell to people who are just wealthy enough to be trapped more or less indefinitely in debt.

kolanos 4y ago

> people simply can't comprehend that 4 payments of $X adds up to 4x Are you implying that someone is paying four times what they normally would for a purchase with BNPL? Or are you saying that someone can't figure out that four payments of $25 is $100?

Manuel_D 4y ago
The link I posted said the latter, people didn't understand that 4 payments of $25 costs the same as $100.
MandieD 4y ago
Four payments of $25 might be instantly recognizable as $100, but quick, what are four payments of 37.74? If you aren’t good at mental math and are already primed to rationalize this impulse buy, your mind might go to “about $120” rather than “somewhat but not a lot less than $160” (or like us nerds, “37.5 is half of 75, which is half of 150, plus about .25 times 4 - $151!”) Their minds are probably more in the “oh, I can swing a bit more than $30 a month for a couple of months to get that sweet pair of sandals” place, though. And they’ve slotted the $28/month for the purse as “$20-something”.

airza 4y ago

I think it's pretty easy to conclude that offering credit cards isn't socially responsible. The company's revenue is maximized if they can identify and sell to people who are just wealthy enough to be trapped more or less indefinitely in debt.