I love the theory that if Klarna folds, there will be some small window where you can pay using klarna and get something for free. It will never happen but I love the idea.
Who would’ve thought that giving “loans” to financially unstable people might not be the brightest idea…
I have no way of knowing for sure, but I keep hearing people are actually using loans for day to day stuff like groceries.
In what world is that sustainable for longer than like, a month?
Amazing, people financing dinner might not be able to pay it off.
They’d better hire some people who specialize in burrito repossession
This shit is wild. You’d figure the capitalists would have a sense of self-preservation and not let things get this bad.
But they make money even if the people don’t pay. They just package debts and sell them off. And if there’s a big crisis, they still make a lot of money buying the dip.
The capitalist class is infinitely more class conscious and understanding of the system as it really is than the working class.
Why give a shit when you can get bailed out? It’s almost like you can be carefree when you’re on corporate welfare. What’s wild is what you feel like you can try when you have a safety net.
Capitalists with capital deal do well in and after a recession or depression.
I swear to god this is literally what happened 100 years ago with credit causing the great depression in the 30s. Are we at a 100 year cycle?
That’s was a part of it. The dust bowl aggravated it further and done other things occurred
Not the same. This is worse. People chose this
No, we are in 20y cycle
Fudge.
I fear you are right. Maybe we can get a housing crisis?
I do keep wondering how these buy now pay later companies see this playing out over a long time.
Klarna was founded in 2005, and Affirm in 2012.
Maybe it’s just the same old tech-startup playbook; Live a good life for 10 years of funding until you get acquired, or hired to another good life fin/tech-startup.
As the other comment says, they’re making their money back in fees. For every dollar they lose because of this, they’re making multiple in fees. It really shows you how bad these services are for you financially if they’re able to be profitable.
I’ve never used one of these services. Are they like a credit card in that they have interest/fees only if you don’t pay off your balance? Or are there upfront fees to using the service?
I haven’t used one either, but I’d be surprised if there weren’t usage charges, or something similar.
I mean isn’t this one obvious? Fees. There’s a ~$4 fee for the basic 4 payments every 2 weeks plan. There are also numerous plans that span various amounts of months. THESE plans have APR up to 30%. Add in your 'I missed a payment, here’s a fee" and it’s basically just a credit card with more rules that requires ~1/4th payment upfront. They also treat each purchase as a separate loan, so you don’t get the benefit of one single monthly payment against the whole balance- each loan must be individually paid - adding up to a lot more than a credit card with a similar balance. And then add in selling marketing data of what customers purchase. It’s a simple and solid business structure.
They also charge the store quite a cut. Because they have such high checkout rate… In some industries it’s allegedly 30%. Paypal does 3.9% or something like that.
Oh, wow!
They also typically require a minimum purchase amount, so you have to spend more than you might have planned in order to use them. That $45 purchase suddenly becomes $55 because you needed to add something to go over $50. Those amounts add up over time and result in overspending.
I have not seen that so far. I don’t click further on this for a payment option, though.
So you have no clue what you’re talking about about
Hello, can your comments please add to the discussion?
Because you’re not actually contributing to the conversation and are just trolling. Or you’re dumb. I’m not sure.
It’s a simple and solid
businessexploitation structure.Please explain how a credit card, especially the spam ones that show up in your mailbox unasked for, is any different.
Everyone is ranting on these services like they’re something new. They’re not.
These are available to a much wider audience. And the placement at the checkout is very manipulative.
You want me to go to my mailbox and show you how many manipulative credit card offers I have just today? You’re still not making any points other than “I don’t like this one particular thing”. Cool, you hate it. Understand how most credit is like this and stopped being shocked it exists. Because that was your original point you’ve so conveniently forgotten: how does this make money? With fees like has been explained to you over and over again.
I don’t care about your personal mailbox.
Please stop being so rude and demeaning with your replies.
I never made that claim. Both can be true.
So you offered no explanation. Thanks for the contribution.
Why are you being so rude?
These are unsecured loans. Your business only works as long as people are paying off their loan. When the economy tanks, when unemployment goes up, when inflation makes food and rent super expensive…, you can only go for so long when enough people stop paying you back.
What did you think I meant?
I honestly don’t know what you mean because if any of that happens all finance gets fucked. This is no different than a payday loan and those have been around forever. Are you just learning today that predatory loan practices exist, and gasp thrive?
Again, you pay more in fees than they give you in loan. They can and will absolutely wreck your credit and sell your debt to collection agencies. And you also realize that the starting credit limit on these things is like $200, right? They’re not giving out $5000 credit lines just for signing up. Actual actuaries have done the work to figure out the risks.
Credit cards are unsecured loans too. The average person only gets a secured loan when it’s a car payment or a mortgage. Unsecured loans are incredibly common.
You have no clue what you’re ranting about, you just want to be mad about something.
Why you keep trying to demean and personally attack people in these comments.
Why are you so dense and think correcting you is attacking you?
Why do you continue to demean in your comments?
Some people are just miserable and want to bring everyone around them down. It’s sad, really.
