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Comment by graceful6800 | Hacker News Reader

Saying "people should be free to get loans that fit their circumstances" implies a level of financial literacy that simply does not exist in this country.

You and I might be able to make educated judgments about a loan and its value/consequences, but the vast majority of Americans cannot. We simply don't teach this kind of thing in our schools, and every day innocent people get absolutely taken advantage of.

If the public were capable of accurately judging the utility/risk of a loan, then sure we can say it should be on the individual to make their own choices. But that is just not the reality we live in.

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I respect that position, and you're right that not everyone is smart enough to make good choices for themselves. I don't carry a balance on my credit cards, which makes me somewhat smart, but I also don't follow all the subreddits about maximixing credit card points, moving balances from here to there, etc. Some people might look down on me for "leaving money on the table" in that regard. I could probably make a thousand dollars a year if I were more informed/aggressive.

I don't want to look down my nose at people who make decisions that I wouldn't make. They also face very different circumstances. What if someone needs to pay for an unexpected medical bill (which they cannot BNPL) and needs to choose between that and rent? What might look like a dumb choice from the outside might be an exercise in constrained optimization.

I've said that I'm open to BNPL being unavailable for certain transaction types, but I wonder if someone with your opinions would rather have them outlawed entirely?

I see both sides of this argument and am really not sure which side I land on. But I wonder if this fits into things like driving, where hey - done recklessly this is dangerous to yourself and others around you, so we require some level of targeted education (e.g. a license). Then if you choose to be reckless anyway its a bit easier to say "it was your own fault".

I bet you credit providers would even front the cost of such a course, since at the end of the day they're still likely to make that money back no matter what.

I think the part that I struggle with is the hard reality that we are largely _not_ teaching people these practical skills in our education system and then expecting them to not get screwed.

In my mind, the externalities of reckless driving are much greater than getting credit on bad terms.

Until, of course, tens of millions of people are taking BNPL loans with 20% interest rates willy nilly. Then when they default, it triggers an economic crisis that affects every single person in the country.

>" implies a level of financial literacy that simply does not exist in this country.

Yeah I get it, looking down your nose at the "median american" is popular in certain filter bubbles.

Everyone getting a short term loan product knows it's a bad idea. They either fall into the category of "I can afford to finance a taxi for my burrito even if it's stupid" or "I know this is unsustainable but if I don't pay for X then Y then Z will happen and that is a guaranteed bad outcome whereas this at least gives me a chance of a good outcome".

There is an element of truth to what you say, but I also think you're being dismissive. It _doesn't_ exist today. For one simple example: how many times have you heard people talk about payraises etc., "bumping me into a higher tax bracket so I actually lose money"? I've probably explained it dozens of times to people I consider entirely intelligent - many of them believe there's this little window at the border of each taxation tier that makes no sense to be in.

Be careful of who is looking down their nose at whom because my words come from having personally bailed out people who genuinely did not have the capacity to make sound financial judgements.

I'm not making judgments of the people you're speaking down about, I'm making judgements of a nation utterly failing to prepare its citizens for the financial realities of our world. It's not a personal failing for hundreds of millions of people to be financially illiterate, it's a failure of society and those elites who like to gaze down at the dirty peasants for not knowing better.

Many forget that the other side of the "personal responsibility" coin is "social responsibility". Often the ones invoking the former can't even conceive of the latter.

Ah yes that's what it comes down to does it not?

Every nation has poor folks. Capitalism demands it. In my country the government gives them up to 20k per year in housing benefits and relief.

Maybe you were lucky to be raised into financial literacy and only circulate around other people who have, and so can only imagine -- with charity -- what other people must be thinking when they take loans.

But others here have been truly naive themselves or have journeyed with intimacy and openness beside a parent, partner, or friend who really just doesn't get it.

The reality is that there are a lot and lots and lots of real people in the real world who sincerelt just don't understand the terms they're agreeing to, how their own finances work, what's plausible in their own financial future (near or long term), etc -- and the companies the design and promote convenience loans know this and they target these people like sharks hunting prey.

They use any and every trick they can get away with to lure these naive people into agreements for which all outcomes (payment or default) favor the shark.

Without regulation of both loan design and presentation, lending naturally become a vehicle usury, vaccuuming assets and opportunity from the many earnet people who will always be too credulous, too trusting, too naive, or too desperate to resist.

Everyone in the demographics most likely to buy these financial products has seen this stuff play out many times by adulthood. They're not stupid or ignorant, or at least not in those ways. They know how it all plays out or how the math maths. They buy these products anyway for human poverty trap incentive to not make good decisions because it won't actually change anything type reasons.

Regulation won't change the fundamental economic reality of those living paycheck to paycheck. It'll just change the form those hardships take.

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