4 ms·

I just this morning bought a new iphone. Choice was something like £500 up front or £20.88 a month for 24 months. No brainer.

by ta1243 3y ago

Gunnerhead 3y ago
I’m assuming the latter if zero percent interest rate?
- aaomidi 3y ago
  20.88*24=501.12
toomuchtodo 3y ago
This is not what most buy now pay later volume is though. It is marketing to originate what is essentially a credit card to a consumer cohort that is rightfully risk adverse to credit cards. https://scholarship.law.unc.edu/cgi/viewcontent.cgi?article=1574&context=ncbi https://scholarship.law.unc.edu/cgi/viewcontent.cgi?article=... https://www.consumerfinance.gov/about-us/newsroom/cfpb-study-details-the-rapid-growth-of-buy-now-pay-later-lending/ https://www.consumerfinance.gov/about-us/newsroom/cfpb-study... https://files.consumerfinance.gov/f/documents/cfpb_buy-now-pay-later-market-trends-consumer-impacts_report_2022-09.pdf https://files.consumerfinance.gov/f/documents/cfpb_buy-now-p... https://www.sfgate.com/news/article/influencers-lead-Gen-Z-into-debt-17142294.php https://www.sfgate.com/news/article/influencers-lead-Gen-Z-i... https://www.cnn.com/2022/07/06/economy/buy-now-pay-later-bnpl-inflation-data/index.html https://www.cnn.com/2022/07/06/economy/buy-now-pay-later-bnp... https://www.cbinsights.com/research/report/buy-now-pay-later-outlook/ https://www.cbinsights.com/research/report/buy-now-pay-later... (disclosure: I have submitted public comments to various regulators on the topic)
saberience 3y ago
If you have to pay for a phone over 24 months then you can't really afford it.
- csmiller 3y ago
  Paying over 24 months is mildly cheaper due to the time value of money
  - saberience 3y ago
    That's not really the point I am making and I think you know it. BNPL options which let someone split a 500 dollar payment over 2 years are there to encourage people to spend money who otherwise wouldn't feel OK about dropping 500 dollars right then. I.e. if you have to use the BNPL option, you can't afford it in the first place. In fact, if you have to even stop and think about whether it's worth splitting it or not it means it's not a good idea.
- helij 3y ago
  I can afford to pay pretty much any household item including phones in full with cash right away. I rarely do if there's 0% interest payment option available. Prefer to invest money in stocks/funds and instant access savings account at 4%+ at the moment. No-brainer.
tomjen3 3y ago
I once got an offer to buy glasses on installments - zero interests but as long as I was paying them off I would have a free insurance. If I paid the full amount I didn't get any insurance. Was totally a no brainer, and a no brainer.
wkat4242 3y ago
Why though? You're paying the same and if you just pay the 500 you don't owe anyone anything. And if you do that with all your stuff (after all, why stop at your phone) your finances will be hella complicated. With all sorts of repayments being deducted at different days of the months, starting and finishing over time. I wouldn't want that. It's seems easier but it makes things more complicated.

I just this morning bought a new iphone. Choice was something like £500 up front or £20.88 a month for 24 months. No brainer.

by ta1243 3y ago

I just this morning bought a new iphone. Choice was something like £500 up front or £20.88 a month for 24 months. No brainer.

Gunnerhead 3y ago

I’m assuming the latter if zero percent interest rate?

aaomidi 3y ago
20.88*24=501.12

toomuchtodo 3y ago

This is not what most buy now pay later volume is though. It is marketing to originate what is essentially a credit card to a consumer cohort that is rightfully risk adverse to credit cards. https://scholarship.law.unc.edu/cgi/viewcontent.cgi?article=1574&context=ncbi https://scholarship.law.unc.edu/cgi/viewcontent.cgi?article=... https://www.consumerfinance.gov/about-us/newsroom/cfpb-study-details-the-rapid-growth-of-buy-now-pay-later-lending/ https://www.consumerfinance.gov/about-us/newsroom/cfpb-study... https://files.consumerfinance.gov/f/documents/cfpb_buy-now-pay-later-market-trends-consumer-impacts_report_2022-09.pdf https://files.consumerfinance.gov/f/documents/cfpb_buy-now-p... https://www.sfgate.com/news/article/influencers-lead-Gen-Z-into-debt-17142294.php https://www.sfgate.com/news/article/influencers-lead-Gen-Z-i... https://www.cnn.com/2022/07/06/economy/buy-now-pay-later-bnpl-inflation-data/index.html https://www.cnn.com/2022/07/06/economy/buy-now-pay-later-bnp... https://www.cbinsights.com/research/report/buy-now-pay-later-outlook/ https://www.cbinsights.com/research/report/buy-now-pay-later... (disclosure: I have submitted public comments to various regulators on the topic)

saberience 3y ago

If you have to pay for a phone over 24 months then you can't really afford it.

csmiller 3y ago
Paying over 24 months is mildly cheaper due to the time value of money
- saberience 3y ago
  That's not really the point I am making and I think you know it. BNPL options which let someone split a 500 dollar payment over 2 years are there to encourage people to spend money who otherwise wouldn't feel OK about dropping 500 dollars right then. I.e. if you have to use the BNPL option, you can't afford it in the first place. In fact, if you have to even stop and think about whether it's worth splitting it or not it means it's not a good idea.
helij 3y ago
I can afford to pay pretty much any household item including phones in full with cash right away. I rarely do if there's 0% interest payment option available. Prefer to invest money in stocks/funds and instant access savings account at 4%+ at the moment. No-brainer.

tomjen3 3y ago

I once got an offer to buy glasses on installments - zero interests but as long as I was paying them off I would have a free insurance. If I paid the full amount I didn't get any insurance. Was totally a no brainer, and a no brainer.

wkat4242 3y ago

Why though? You're paying the same and if you just pay the 500 you don't owe anyone anything. And if you do that with all your stuff (after all, why stop at your phone) your finances will be hella complicated. With all sorts of repayments being deducted at different days of the months, starting and finishing over time. I wouldn't want that. It's seems easier but it makes things more complicated.