It also allows people to build their credit without a credit card.
But yes: people shouldn't be using it to buy things they can't afford.
I actually looked into this when I first saw these companies spring up, as I figured it couldn’t hurt to build up my credit some more, for free.
Unfortunately, unless I was mistaken, what I determined was that these companies don’t report your positive activities to the credit bureaus. The net result is that there’s nothing but downside from a credit perspective.
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1. Stør was similar to IKEA but Danish and a bit more downmarkt
The seller would not give me a lower price if I paid all or a portion in cash at the time of purchase. The only cost to me is the effect on my credit, but that is negligible unless if you are not excessively indebted.
I used to offer 0% and absorb the cost of the financing (which cost me approx 2% of the profit) because it meant purchases from people who otherwise wouldn’t buy it.