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Comment by chrisseaton | Hacker News Reader

The long-term effects of a zero-interest loan? What are those?

The OP is onviously using hyperbole, but there are certainly long term effects from encouraging people to spend beyond their means. For example, it makes people's financial position more precarious: if your income is mostly committed to monthly payments, you are in more danger of getting into trouble from a layoff, illness, etc. If a big portion of society is in this position (and they are) this is a concern.

I think people should be allowed to make their own choices, but I don't believe it's harmless to promote living beyond one's means.

Right. Afterpay, Affirm, Klarna, etc. are generally not used by well off and financially literate/prudent people. Just like gambling and lotteries. They are generally used by people that don’t need help screwing up their finances. While I do agree that people should be free to do what they want I think it should be presented with some realistic and frankly harsh warnings.

You sound like a BNPL marketer. The loan has late fees, the app is branded as a easy POS way to buy things with money you don't have. There is no credit check. You can sign up to a dozen of the services at once. It is credit, it has the same negative effects as credit.

BNPL is as bad for people as 20% apy credit cards are.

Being more charitable, I think it's marketed as a way for people who budget monthly to spread their charges.

The point is that if they're stretching payments over multiple weeks/months then they can't afford it.

Would you say the same about a house? A car?

You might say that buying a house on credit isn't frivolous but a pair of shoes on credit is, but where do you draw the line in the middle?

(Disclaimer: I work at Square, but I am otherwise completely uninvolved with this acquisition or product area.)

Great question and made me think. I think the difference may be that people that need to stretch payments for smaller purchases tend to build up credit card debt and fall into 18% APR for years and never get out of it.

Car loans and Houses have a very controlled lending market. Even more so with business loans.

I think there is big difference between monthly payments for a Go Pro camera and debt financing your new restaurant.

What is your logic behind that?

Right. They are giving out interest free loans to people out of the goodness of their heart. What a swell company. Wait what? They make more profit when people fuck up? Well I am shocked.

the business model is that BNPL will eat the risk, they won't sent a debt colector after you, they simply won't loan you more money. It's much more humane than credit score which is a form of social credit.

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