Don’t have the cash? Don’t get the thing. Best advice my mother ever gave me.
this post was submitted on 22 Jan 2024
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Weirdly, I got told the opposite. One of my first jobs was at a builder's merchants, and I was the office lackey for the head accountant. His advice was to always pay off the value of the asset over its lifespan.
I suppose then, it would introduce an additional educational burden of interest rate calculations, depreciation, and all the other exciting things with financial planning, budgeting, and general adulting.
e: from a personal standpoint, it sounds wonderful but I can't be arsed with juggling everything effectively being turned into a subscription. Unless it's a 0% finance offer then I'd rather just cough up outright and deal with the financial hole later.
I understand this on an intellectual level but simply can't bring myself to finance anything.
personal debt is a trap I've seen too many people get caught by.
It is a trap because, for a lot of people, money isn't a number but an on/off switch. You either have enough money to buy something or you don't instead of being able to understand the short and long term impacts of taking on debt.
Some personal debt can be beneficial, but a lot can lead to major problems.
I agree. I think it's something that needs far more time on at an early age - whether it's something integrated into a maths curriculum or something as part of a wider "how to survive in a modern world" courses about taxes, finances, bill payments, wills and death planning etc - all of which are likely massively outside the scope of this post.
I just don't like the idea of death by a thousand paper cuts - or rather a thousand direct debit entries for Klarna, Very, PayPal Credit, Littlewoods, House of FraserCard, etc. I'd lose track of them too easily.
That said, the last two purchases I took out on finance was an Xbox Series S as it came with two years of Game Pass for a quid more expensive than buying them outright over the same term - and a phone from Very which offered a 20% discount if you ordered it as a new Buy Now Pay Later customer... and the balance was paid a month later.
You're confusing personal debt with business debt.
I save up for a thing so I have the cash, but justify the expense to myself by dividing the enjoyment factor over the time I own and use the thing.
I outright refuse subscriptions, I love geoguessr, and will buy giftcards for a year or two when I have the money, and then not worry about it, if I don't have the money next time, I will simply let it run out, and wait untill I have money for a gift card.
That's something I could never understand: how do people sign up for as many as 10 credit cards and then buy stuff with money that isn't really there, then dealing with debt collectors?
It doesn't make sense to me, but I've met people who are OK with living like that
Because - and I feel like I need a shower after writing this - there's a really, really profitable middle ground there of people who have indeed taken out those ten credit cards, horsed them to near their limit, but have enough income per month to cover key bills and the minimum payments per month on all of those credit cards... but with not enough income to make a dent in the actual balance to break out of the trap of being lumbered with debt.
Rich enough to be able to hold off the debt collectors every month, but poor enough to have little or nothing else left over every month.
You're right. I do understand why people end up choosing to do that, but it feels like there's been a "training" to spend a lot to show your status or simply "because you deserve it" and instead (just like mentioned in an answer above), school or family has not taught any financial sense and people jump on purchasing without a real clue (even though they think they do)
I don't understand it either. Unfortunately, I know quite a lot of people in my personal life that are terrible with money like that. A lot of people grew up in families with terrible financial sense and then they bring that with them into adulthood. Some people eventually figure it out but by that time they're pretty late on getting their retirement planning going.
That's true and it's heartbreaking: when they realize they've screwed up their finances and that they should have had better sense, they're far too gone. Families or school don't teach this hard enough, if the phenomenon is so widespread.
I’ve used Klarna to pay for doctors appointments because we live in a hellscape.
Did people think this wouldn't catch up to them?
This sounds like a problem for future me
And past me is an asshole.
What a terrible debt to accrew. Dont get me wrong I believe everyone deserves a holiday. But man you're just blowing borrowed money at this point.
Always has been...
So I have thought about doing this option for some large purposes, but figured there must be a catch. There's no interest, but I believe there is a flat fee for each of the distributed payments in these plans. I thought it was a bit scummy how it's so not clear that was the deal.
On paper interest free loaned money is free money. You could buy a short term CD and come out ahead before the payments catch up. Or maybe you have annual credit card minimums, so it makes sense to distribute the payment of goods from Dec to January the following year to have more qualifying payments on a rewards card or something.
But between the challenge of not keeping track of many pay later options with different dates and not being aware of the fees, these things seem like a disaster. There's also a whole nightmare for how these things work with returns or items never received...
Uh not sure what service you've seen but the ones I've used in the past had no fees. The amount times all the payments was exactly the checkout cart amount for paying with CC. I've used them a few times on larger items and just autopayed to my CC so I get rewards and 0% loan, never had to check on the dates they were due but they also text you to remind you the autopay.
I also had to return some RAM from one of the pay services mid payments. They froze the payments with no fee and the merchant updated them automatically to let them know I did infact return it. Got the amount paid already refunded within the week.
It was for a more expensive purchase, like a 2000 or 3000 dollar item. For merchants BNPL is about twice as expensive than your average credit card fees. Do some vendors have options to pass that off to the buyer?
For returns, I see articles like this pop up from time to time which made me nervous: https://www.cnbc.com/2022/06/29/buy-now-pay-later-loans-can-get-complicated-when-you-want-a-refund.html
Also, when it comes to credit card transactions... do you get points like normal. IE if your credit card offers you warranty protection or category bonus, does the payment going to the BNPL break the category point or protection since the BNPL actually pays for the item/good/service while your credit card is just paying off the loan?
Stop. Buying. bullshit.
While i don't do it anywhere to the level of needing a loan. I get it, the dopamine hits hard and everyone is fighting their own demons.
Life is short and they're fucked anyway, so what's another £50 a month to get some joy out of their situation?
I have debt i likely won't repay in the next 4 years... Should i put my family's life on hold? I might save to go on a nice holiday instead of paying it off sooner. Kids will only have one childhood and it's a sacrifice people have to consider.
With blood.
Idiots.
Consumers are now mastering the art of turning 'Regret' into a new currency.