2 ms·
Cut to a few years later and the cost of things has risen faster than my income and my brain is still "COVID rich", I can see why credit card balances are highe
by reaperducer 2y ago
Cut to a few years later and the cost of things has risen faster than my income and my brain is still "COVID rich", I can see why credit card balances are higher and defaults are more common.
Add to it the rise of buy-now-pay-later schemes like Klarna and Affirm, which for a long time would allow you to make your payments with a credit card, allowing people to run up more debt faster than ever before.
It's my understanding† that making payments with a credit card is no longer permitted, so now these companies are pulling cash out of already over-extended people's checking accounts, keeping them from paying their credit cards.
Fintech wins. Traditional credit cards lose. Human beings lose harder.
† I have never used any of these services, but I know people who have, and it all sounds like loan sharking to me.
- whaleofatw2022 2y agoKlarna/affirm do often seem to be the thing I see 'not financially stable' folks use. Most recent example being someone considered an 'adult child' of the state and on SSDI that used Affirm to pay for some xmas presents. > It's my understanding† that making payments with a credit card is no longer permitted, Ive never used them myself either but it would surprise me if they allowed credit cards for payment ever. In my head they were trying to make their money back on the loan via the merchant rate 'padding' (i.e. usually 1-2% of the item price). Which of course, in this non NZIRP/ZIRP climate means they have to find other ways of making/saving money... (didn't klarna just do a layoff?)