6 ms·

Lol what are credit cards? Most Americans buy now and pay later for everything. I don’t think it’s good, but that’s the truth.

BizarreByte 4y ago
It's good if you do it responsibly. If you put everything on a good rewards CC and pay it off soon after you will come out ahead.
- lotsofpulp 4y ago
  The bar for “responsibly” is as low as it can get. It is just spending a few minutes to set up autopay on the credit card website, and acting like your credit card is a debit card.
  - NotYourLawyer 4y ago
    And having enough money that this never backfires.
    - notch898a 4y ago
      There are several (most?) credit cards you can settle it nightly if you like.
    - lotsofpulp 4y ago
      This is covered by > acting like your credit card is a debit card.
Invictus0 4y ago
Why pay for anything in cash if credit cards are giving 3% back + perks?
- barbazoo 4y ago
  The whole not being part of the problem thing I'd say. We are all paying for those perks one way or another.
  - Invictus0 4y ago
    No "we" aren't. People paying with cash are paying for it.
tekla 4y ago
I get a 2-3% discount on everything with credit cards. There is literally no downside to using credit cards
- docdeek 4y ago
  I suspect the downside to using credit cards comes when you don’t pay (or can’t pay) the bill during the interest free period or at the end of each month.
  - tekla 4y ago
    How is that different from not having the cash to buy something in the first place?
    - docdeek 4y ago
      It’s a downside to credit cards, as opposed to “no downsides” to credit cards.
      - pb7 4y ago
        It's not a downside. The credit card didn't make you spend money you didn't have, you did.
    - jcranmer 4y ago
      If you are physically giving up cash, it is much easier to figure out if you have insufficient cash to make a purchase. With a credit card, it is less obvious to figure out that the balance on the card now exceeds the cash you have to pay it off. It can be done, true, but it requires a level of diligence that most people don't have.
      - Jochim 4y ago
        Even people who do have that diligence can be caught out. You do the calculation, make the purchase and a week later encounter an unexpected expense like your car breaking down, or you lose your job. You may now find yourself unable to make the full repayment despite having thought about the purchase before making it.
waboremo 4y ago
It's not just Americans, the BNPL industry has seem tremendous growth around the world. China reports credit card usage quadrupling and alongside that BNPL schemes, Europe is expected to see the BNPL industry hit close to $1 trillion by 2028. It's a global phenomenon unfortunately.
- r00fus 4y ago
  This is terrifying. Googling this definitely raised my stomach acid levels. Who holds all the debt?
  - StopHammoTime 4y ago
    Every single debt is underwritten individually by a originating bank. Within a few days the BNPL provider is expected to buy that debt back once the remittances to vendors have been made. The BNPL company then takes on the debt. BNPL makes their money by charging a network fee. AFAIK AfterPay charges about 7% and this is meant to cover the debt charges from the banks and administration fees.
- chatmasta 4y ago
  I recently learned that Klarna is a Swedish company, and was founded in 2005 [0], which surprised me because I don't remember seeing it anywhere until the past ~5 years, when it started appearing as an option on nearly every checkout page. [0] https://en.wikipedia.org/wiki/Klarna https://en.wikipedia.org/wiki/Klarna

BizarreByte 4y ago

It's good if you do it responsibly. If you put everything on a good rewards CC and pay it off soon after you will come out ahead.

lotsofpulp 4y ago
The bar for “responsibly” is as low as it can get. It is just spending a few minutes to set up autopay on the credit card website, and acting like your credit card is a debit card.
- NotYourLawyer 4y ago
  And having enough money that this never backfires.
  - notch898a 4y ago
    There are several (most?) credit cards you can settle it nightly if you like.
  - lotsofpulp 4y ago
    This is covered by > acting like your credit card is a debit card.

Invictus0 4y ago

Why pay for anything in cash if credit cards are giving 3% back + perks?

barbazoo 4y ago
The whole not being part of the problem thing I'd say. We are all paying for those perks one way or another.
- Invictus0 4y ago
  No "we" aren't. People paying with cash are paying for it.

tekla 4y ago

I get a 2-3% discount on everything with credit cards. There is literally no downside to using credit cards

docdeek 4y ago
I suspect the downside to using credit cards comes when you don’t pay (or can’t pay) the bill during the interest free period or at the end of each month.
- tekla 4y ago
  How is that different from not having the cash to buy something in the first place?
  - docdeek 4y ago
    It’s a downside to credit cards, as opposed to “no downsides” to credit cards.
    - pb7 4y ago
      It's not a downside. The credit card didn't make you spend money you didn't have, you did.
  - jcranmer 4y ago
    If you are physically giving up cash, it is much easier to figure out if you have insufficient cash to make a purchase. With a credit card, it is less obvious to figure out that the balance on the card now exceeds the cash you have to pay it off. It can be done, true, but it requires a level of diligence that most people don't have.
    - Jochim 4y ago
      Even people who do have that diligence can be caught out. You do the calculation, make the purchase and a week later encounter an unexpected expense like your car breaking down, or you lose your job. You may now find yourself unable to make the full repayment despite having thought about the purchase before making it.

waboremo 4y ago

It's not just Americans, the BNPL industry has seem tremendous growth around the world. China reports credit card usage quadrupling and alongside that BNPL schemes, Europe is expected to see the BNPL industry hit close to $1 trillion by 2028. It's a global phenomenon unfortunately.

r00fus 4y ago
This is terrifying. Googling this definitely raised my stomach acid levels. Who holds all the debt?
- StopHammoTime 4y ago
  Every single debt is underwritten individually by a originating bank. Within a few days the BNPL provider is expected to buy that debt back once the remittances to vendors have been made. The BNPL company then takes on the debt. BNPL makes their money by charging a network fee. AFAIK AfterPay charges about 7% and this is meant to cover the debt charges from the banks and administration fees.
chatmasta 4y ago
I recently learned that Klarna is a Swedish company, and was founded in 2005 [0], which surprised me because I don't remember seeing it anywhere until the past ~5 years, when it started appearing as an option on nearly every checkout page. [0] https://en.wikipedia.org/wiki/Klarna https://en.wikipedia.org/wiki/Klarna