alt Hacker NewsThis would probably only affect the people with the worst credit scores I imagine. I just don't see a ton of 800+ credit score people deciding to spend 5 payments of $20 for a pair of $80 shoes.
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Plenty of people with good credit use BNPL loans; they are offered on much higher cost items than $80.
Shifting a cost forward a couple months interest free is a great deal for people who are financially responsible, especially if you have some other loan (like a mortgage) that you could be paying off more of instead.
It's no different to the practice of using a credit card for everything and then paying off in full a month later because the credit card interest is lower (often zero if you pay off within a month) than the mortgage interest.
A lot of young people where Affirm-ing their DoorDash etc. even though they had the money
Except it's 4 payments of $20. The whole selling point is that they're zero interest. It's CC float without the CC.
A lot of BNPL loans are offered at 0% for X payments. Usually 6 months, sometimes 12 months on larger purchases.
Given current interest rates, I take that deal WHENEVER it's offered.
I always thought it was interesting that the BNPL loans’ interest is subsidized by the retailer, which pay the premium in order to improve the chance of a sale (hoping to hone in on those who can’t afford it now and make it back on that extra spend). Which means high credit score, wealthy spenders could put everything they can on BNPL plans and profit the (minuscule) interest over time, but if you can do that on big purchases, maybe it’ll add up. Same way credit cards work, if you have the cash flow and always pay them off in full, you can make a few bucks in a HYSA for the 40 ish days before the statement.
I can see a future where a BNPL loan is not offered if the signals the checkout page collects indicates wealth, since they don’t have an issue of cash flow stopping a purchase. Imagine a loan that has a credit score maximum, not a minimum.