3 ms·

I had bad credit (grew up poor, learned terrible habits, getting better) for a long time and Affirm has been great. I do the every 2 weeks no interest loans and

by wincy 3y ago

I had bad credit (grew up poor, learned terrible habits, getting better) for a long time and Affirm has been great. I do the every 2 weeks no interest loans and I love it compared to credit cards where I’d just irresponsibly carry a balance. The default “financial hygiene” of the loan and the fact that I’m paying for a product I remember makes it great for me. There was a heat wave and I bought an air conditioner yesterday using Affirm to smooth out the payments. In fact I cut up all my credit cards about a week ago and plan to only use BNPL vs credit cards going forward if I’m in need of a loan.

lukev 3y ago
The irony here is that you'll need to use (and regularly pay off) credit cards if you want to improve your credit.
- sokoloff 3y ago
  You don’t need to regularly pay off your credit cards to improve your score; you merely need to make the payments on time and not have too high a utilization ratio.
- Guvante 3y ago
  Anything that reports to credit bureaus counts. Also I am always surprised when people don't treat CC expenses as they would cash... CC interest has always been intolerably high to me. I totally get emergencies and now I am out money. I don't get rolling balances when that costs you like 2% per month.
  - wincy 3y ago
    I know, I know, I can talk all day about being rational but then I REALLY want an RTX 4090 (to learn machine learning of course! Trust me bro! Then I just play video games on it and oh why not upgrade the rest of the computer, as an aside proud of myself I got an NVIDIA RTX3080 used for $400 instead) and there’s no way my wife would be okay with an $1800 expense on the debit card but she might not notice 6 months of $300 payments. It’s easier to fight back when the loan terms are explicitly laid out, “okay you’re getting a one year loan and it’ll be $1000 loan and $300 you’re going to pay in interest”. And I’m like “okay I’ll wait and just save up”. The lesson I learned growing up with a single mom was “spend the money immediately or else stepdad will spend it on drugs, money is a liability, you’re better off having things, harder to pawn vs cash”. And credit cards just makes that highly dysfunctional mindset that’s burned into my brain even worse.
    - Guvante 3y ago
      Zero percent loans don't bother me at all. It is the 25% APR that I think is a problem financially.
- wincy 3y ago
  I do use them! I just wasn’t using them in a healthy way. I took a picture and am paying them off then plan on using them to pay bills then pay the balance every month. Before I would just swipe the card and make minimum payments and watch as the balance slowly crept up to the max. I starting paying them all off earlier in the year and some of the credit cards immediately did a 10x my credit line, then I thought “why not get a MacBook Pro?” Like I said, on me but credit cards are just a cognitive hazard for me and short circuit my brain (which is what creditors love!) At least with Affirm or BNPL I know the exact terms and know it’ll be paid off in exactly a year. It’s much easier to reason about for my impulsive brain vs “loan that lasts forever from the credit card company and you pay absurd amounts of interest because you’re dumb”. My mom declared bankruptcy twice so I’m still doing better than her but it’s hard to get an innate sense of “we don’t have the money for that” growing up in a household where if there was money in the bank it was spent ASAP. On the bright side there’s more money in my 401(k) than I owe in debt, which is nice. I know the optimal strategy would be “contribute to the match then use the rest to pay off debts then increase” but I just don’t trust myself. It’s like I’m in an eternal struggle with a rational me and an impulsive shopping spree dopamine seeking me, that just wants immediate gratification. Luckily it seems like with age the rational one is getting stronger.
- wkat4242 3y ago
  That's only in the US. Here in Europe any debt reduces your credit rating, having no debts at all is much better. It makes more sense too, after all what really proves that you're good with money is when you've never needed borrow in the first place. "Churning" cards like in the US is the best way to tank any chance of getting a mortgage here. They really prefer to see customers with a clean slate. Buying a phone on a pay later scheme, even a normal mobile contact that's for a minimum duration will hurt it (and will reduce your available mortgage by more than the actual loan amount)
paxys 3y ago
If you have the discipline to pay off your Affirm loan every two weeks why can't you do the same with your credit card bill? In the latter case you are actually building credit history, getting consumer protection and earning points/miles. Or if you really want to build better financial habits why even take loans every two weeks?
- maerF0x0 3y ago
  I would assume it has to do with mandatory payments on affirm vs absurdly low minimum payments on CCs.
  - paxys 3y ago
    It's the opposite. CCs have mandatory payments and high interest if you miss the. Affirm has no penalties even if you miss every single payment.
    - maerF0x0 3y ago
      Oh, i didn't even realize that even though I've used them xD . They kinda railroaded me onto paying the right amount each time on time to pay 0% interest. I just set it up and forgot about it and it worked.
    - wincy 3y ago
      They won’t penalize you financially BUT they will report the missed payment to credit reporting agencies.
- wincy 3y ago
  Affirm has autopay and the loan terms are crystal clear. I certainly could structure my payments of the credit card like that but out of sight out of mind. And the answer is because I am only 98% a rational human being. The other 2% is a weird vain conceited animal that doesn’t believe the future exists who wants shiny things and he wants them yesterday. I’m lucky my income has increased faster than my desire for more stuff, at least. But to be fair, that number has improved quite a bit! In my 20s I was literally insane. Like, I took out student loans and lost all the money playing high stakes blackjack (Yes I realize that is absolutely insane). At some point I realized the future is an actual place that really exists and have been trying to be more courteous to future me. Mostly after having children and not wanting them to live a horrible life because of me.

by wincy 3y ago

lukev 3y ago

The irony here is that you'll need to use (and regularly pay off) credit cards if you want to improve your credit.

sokoloff 3y ago
You don’t need to regularly pay off your credit cards to improve your score; you merely need to make the payments on time and not have too high a utilization ratio.
Guvante 3y ago
Anything that reports to credit bureaus counts. Also I am always surprised when people don't treat CC expenses as they would cash... CC interest has always been intolerably high to me. I totally get emergencies and now I am out money. I don't get rolling balances when that costs you like 2% per month.
- wincy 3y ago
  I know, I know, I can talk all day about being rational but then I REALLY want an RTX 4090 (to learn machine learning of course! Trust me bro! Then I just play video games on it and oh why not upgrade the rest of the computer, as an aside proud of myself I got an NVIDIA RTX3080 used for $400 instead) and there’s no way my wife would be okay with an $1800 expense on the debit card but she might not notice 6 months of $300 payments. It’s easier to fight back when the loan terms are explicitly laid out, “okay you’re getting a one year loan and it’ll be $1000 loan and $300 you’re going to pay in interest”. And I’m like “okay I’ll wait and just save up”. The lesson I learned growing up with a single mom was “spend the money immediately or else stepdad will spend it on drugs, money is a liability, you’re better off having things, harder to pawn vs cash”. And credit cards just makes that highly dysfunctional mindset that’s burned into my brain even worse.
  - Guvante 3y ago
    Zero percent loans don't bother me at all. It is the 25% APR that I think is a problem financially.
wincy 3y ago
I do use them! I just wasn’t using them in a healthy way. I took a picture and am paying them off then plan on using them to pay bills then pay the balance every month. Before I would just swipe the card and make minimum payments and watch as the balance slowly crept up to the max. I starting paying them all off earlier in the year and some of the credit cards immediately did a 10x my credit line, then I thought “why not get a MacBook Pro?” Like I said, on me but credit cards are just a cognitive hazard for me and short circuit my brain (which is what creditors love!) At least with Affirm or BNPL I know the exact terms and know it’ll be paid off in exactly a year. It’s much easier to reason about for my impulsive brain vs “loan that lasts forever from the credit card company and you pay absurd amounts of interest because you’re dumb”. My mom declared bankruptcy twice so I’m still doing better than her but it’s hard to get an innate sense of “we don’t have the money for that” growing up in a household where if there was money in the bank it was spent ASAP. On the bright side there’s more money in my 401(k) than I owe in debt, which is nice. I know the optimal strategy would be “contribute to the match then use the rest to pay off debts then increase” but I just don’t trust myself. It’s like I’m in an eternal struggle with a rational me and an impulsive shopping spree dopamine seeking me, that just wants immediate gratification. Luckily it seems like with age the rational one is getting stronger.
wkat4242 3y ago
That's only in the US. Here in Europe any debt reduces your credit rating, having no debts at all is much better. It makes more sense too, after all what really proves that you're good with money is when you've never needed borrow in the first place. "Churning" cards like in the US is the best way to tank any chance of getting a mortgage here. They really prefer to see customers with a clean slate. Buying a phone on a pay later scheme, even a normal mobile contact that's for a minimum duration will hurt it (and will reduce your available mortgage by more than the actual loan amount)

paxys 3y ago

If you have the discipline to pay off your Affirm loan every two weeks why can't you do the same with your credit card bill? In the latter case you are actually building credit history, getting consumer protection and earning points/miles. Or if you really want to build better financial habits why even take loans every two weeks?

maerF0x0 3y ago
I would assume it has to do with mandatory payments on affirm vs absurdly low minimum payments on CCs.
- paxys 3y ago
  It's the opposite. CCs have mandatory payments and high interest if you miss the. Affirm has no penalties even if you miss every single payment.
  - maerF0x0 3y ago
    Oh, i didn't even realize that even though I've used them xD . They kinda railroaded me onto paying the right amount each time on time to pay 0% interest. I just set it up and forgot about it and it worked.
  - wincy 3y ago
    They won’t penalize you financially BUT they will report the missed payment to credit reporting agencies.
wincy 3y ago
Affirm has autopay and the loan terms are crystal clear. I certainly could structure my payments of the credit card like that but out of sight out of mind. And the answer is because I am only 98% a rational human being. The other 2% is a weird vain conceited animal that doesn’t believe the future exists who wants shiny things and he wants them yesterday. I’m lucky my income has increased faster than my desire for more stuff, at least. But to be fair, that number has improved quite a bit! In my 20s I was literally insane. Like, I took out student loans and lost all the money playing high stakes blackjack (Yes I realize that is absolutely insane). At some point I realized the future is an actual place that really exists and have been trying to be more courteous to future me. Mostly after having children and not wanting them to live a horrible life because of me.