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Comment by fluffything | Hacker News Reader

I'm also a human being from planet earth, and if I'm ok with paying X in cash to buy something, and the other persons offers me paying it in interest-free rates, it would be stupid for me not to.

Worst case, I move the cash to a 2% interest rate bank account and let it sit there. Best case, there are other investments I can make now with that capital, and end up paying less overall for whatever I was buying because having the money has made me money in some other way. Lucky case, the company bankrupts and I don't end up having to completely pay for the thing at all.

Being also European, it is rare to be offered interest-free financing, and when you are, is because you are already paying a premium and could find the stuff cheaper somewhere else. But occasionally, some shops do have the cheapest price and still offer interest-free rates. I always take it, and have no idea why I wouldn't do that.

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> if I'm ok with paying X in cash to buy something, and the other persons offers me paying it in interest-free rates, it would be stupid for me not to.

Disagree. This severely complicates my economy.

Instead just having X funds less available, I still have the same funds at disposal, but have to remember I owe X to Y which must be paid by Z.

Even just once this makes the simple question “How much disposable funds do I have?” hard to answer.

More than once and I will need a system to manage my own personal economy. That’s horrible!

When asked for credit I always answer no, because the small savings of delayed payment does in no way make up for the extreme complexity it adds to day-to-day economics.

This is not a hard problem to solve... Personally I use YNAB[1], but there are plenty of other options out there.

[1]: https://www.youneedabudget.com/

What I do has worked great for >10 years: - Direct deposit paycheck into checking account 1(the main account) - automatically transfer spending money to checking account 2 (I call it the Petty Cash account) - auto transfer $x for the large recurring or known but infrequent bills into savings account 3 (I call it the Escrow account) - Only issue bill payments from the main account - Only walk around with debit card for petty cash account. I also use this for online purchases, Amazon etc - As needed, transfer from escrow to main to pay off something big, like property tax or car insurance.

Play with the transfer amounts to suit your budget. This helps you not have to think about spending money, or if you have enough to pay rent that month.

Back to the furniture example from grandparent comment, I simply ensure that main has enough in it each month to cover the monthly expenses. HTH

> Disagree. This severely complicates my economy.

Some online banks have virtual subaccounts, which let you 'hide' money from your main account, if that's the way you are tracking funds available.

> More than once and I will need a system to manage my own personal economy. That’s horrible!

You already have a system, and it sounds like it's 'ask the bank how much money I have'. In the not too distant past, checking accounts came with a checkbook that included a register for you to track your expenses, but I guess humanity has declined.

You're going to need a "system" to manage your finances no matter if you buy furniture on credit or not.

In fact, if you aren't buying on credit your finances are more complicated because you have to plan ahead make sure you've got future major expenses covered.

> a 2% interest rate bank account

I'm fascinated by this. Where do you find these sky-high interest rates in banks?

https://www.doctorofcredit.com/high-interest-savings-to-get/

There are several floating around right now.

Ally Bank, wealthfront etc.

The key is to make sure they're FDIC insured.

https://www.bankrate.com/

Make sure you go past the "featured" ones :-)

In this case they make they money with people that forget about it, or do it late and pay huge premiums. I don't want to encourage this business model, that's why I don't do it.

No, they offer the credit to incentivize you to make the purchase right now, don't think about how to pay it now, because ... you can just pay it over a year.

And it's perfectly okay for example if you just bought a new flat and you're broke as fuck, because you spent all your cash on must-repair stuff, like getting the plumbing in order, but you also fancy a new bed, because you have none, so interest free bed it is!

Of course if you barely make enough to live month-to-month, then it's unlikely you'll be able to pay the monthly installments of the loan. (And usually you'll be declined even the in store zero-interest loan too.)

But why do the banks do it if they don't get any interest? It seems they are just loosing money here.

Have you seen eg. Germany's bond yields? They are negative. People love safe money parking, they don't want to take risks, manage investments, oversee companies, fiddle with product development, bet on innovation, think about market fit. So they do the next best thing, try to come up with minimal risk minimal profit financial products, and that's what these furniture/fridge/oven loans are.

Furthermore the shop pays some service fee to the loan provider, and thus they scrape by.

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