Hacker News Reader

Comment by _huayra_ | Hacker News Reader

Maybe I just haven't had the opportunity to buy any big ticket items with BNPL, but the few times I tried it (trying to do the "free money" thing, getting a bit more interest in my HYSA by amortizing the total payment out over time), it just created kind of a financial tracking nightmare. I'd get flurries of emails about how my "pay in 4" payment was about to process....for $13. Trying to keep track of all that for a few pennies became too difficult (matching up which purchase each micropayment was from), although those pennies add up for larger purchases indeed!

But for a floor rate of 10%, BNPL is just a less terrible credit card, not a good deal :(

View on HN

This is my take too. A $10,000 purchase on 0% interest for a year earns you ~$400 in interesting from a money market fund or whatever. I'm in a high tax bracket so $160 of that goes to the government. So even for a large purchase I net $240 in a year. Hooray.

Decrease the total cost of things purchased in this manner or increase the number of different things to track (or both) and suddenly I'm paying quite a bit more in additional mental energy than I benefit in cash.

The only place where this makes sense (IMO) is when you buy a new car and can get 0% and no payments for more than a year

When you phrase it this way, it sounds very comparable in terms of return to a credit card rewards program

The nice thing about a credit card rewards program is that it requires zero mental effort. Some people like spending more effort to do churning or whatever, but I make the same computation in that case and conclude that the extra money isn't worth my time.

Paying without a credit card is just supporting the credit card fees of those who do pay with one. The price is the same, but you often get 2 or even 3% cash back (depending on offers).

Anyone financially responsible (i.e. that won't get enticed into carrying a balance by the opportunity to get cash back) is leaving money on the table by not using a credit card (with good rewards).

The BNPL schemes are targeting low income customers who either can't or won't use credit cards.

The frequent little payments is a "feature". If you can't handle a $200/mo credit card bill, getting emails for $8 here or $11 there is probably easier.

How does the floor rate make it a less terrible credit card?

Because you're paying interest. My credit union offers an 8% APR; a 10% BNPL gives me no benefit over that.

Reply on news.ycombinator.com