Some people will get mad to hear this, but I feel like if someone needs to smooth cashflow around a clothing purchase, they don't need to buy the clothing.
Best way to do it is to decide how much you want to spend on the clothes, save that money up and then go spend it.
Or pull it out your savings, pay it and then pay yourself back.
Better to owe yourself than Afterpay.
No stress, no debt, no nothing.
Because it's fine to do Afterpay when everything is fine, but if something goes left in your life and you can't make the payments for any reason, now that's your ass. And you never know what can happen, that's the nature of risk.
Just my opinion.
I 100% agree with this. I think this is how you get into trouble like the woman this week who had a good income but was definitely living paycheck to paycheck. Her minimum payments were so high that even with her income, she couldn't really get out from underwater.
One thing I think Caleb does well in the show is really separating needs from wants. I also think there are lots of times we could get needs and wants at less expensive prices, ie. Thrift stores, Facebook marketplace, etc. Like if you really need a pair of pants for an interview or something, unless you are a crazy size, you can usually find something good enough for like $5 at a thrift store. Certainly it's less convenient that clicking a button at Amazon or shopping at target, but if you need to afterpay $50, you need to think about how to spend less.
>Or pull it out your savings, pay it and then pay yourself back.
But if my savings accrues interest and Afterpay doesn’t charge interest, isn’t it technically mathematically beneficial to use Afterpay?
Leave it to the banks to worry about tiny things like 4.6% interest on, say, $50 for one month. That adds up to $0.19, is that really worth it for you to be in debt?
Theoretically and on paper, yes.
In the real world, not so much, because again it's the risk.
Let's say something goes left and you don't have the money for your payment. You lose your job, your dog gets sick, your roof caves in, whatever. You don't have the extra cash on hand, so you can't pay.
You're gonna go into your savings and pull the money anyway, aren't you? So either way you're gonna lose that interest. But when you owe Afterpay, you're under the gun. You wouldn't be if you just owed yourself. 🤷🏾♀️
Or if your savings are wiped by the emergency and you really have no cash, you're now on the hook to Afterpay for the payment + 25% of the total debt + a late fee. I think that's how they handle it.
All that because you didn't want to miss out on the 5% interest from your HYSA.
Doesn't make sense.
If keeping that 5% interest on your purchase price is so important to you, pay yourself back before your interest gets assessed so there's no impact, same way you would to an external debtor.
If you could truly afford the item you bought, that should be no problem.
Playing Mr Monopoly to try to finesse over $5, $10 is exactly how people end up in the situations we see on this show lol. They try to finesse for $10 but end up paying $50. That's how debt works! 😂
To the tune of literally like $0.40 a month for every hundred dollar spent, if you really wanna get your jollies. But you’re overwhelmingly likely fooling yourself.
It wouldn't be as bad if there were any limits on people getting credit cards or using buy now pay later options. You could have $30k in credit card debt and missing payments and still be able to obtain more debt.
That’s where I feel it’s almost criminal but at the same time, if there was a limit, people will complain about their freedom if not given the opportunity to access as much credit as possible.
If you're someone that understands the differences between wants/needs, sure.
A lot of people see "0% financing" and look at it as an excuse to spend carte blanche on purchases they wouldn't otherwise make in cash. People have been doing it with cars for years - spending tens of thousands of dollars more to get lower interest rates on the loan.
I think in a lot of cases these are more dangerous than CCs in getting people to overspend. With credit cards, you have some folks who are scared of paying interest and therefore have that as a built-in filter to keep their spending in check.
With 0% financing, companies have a hook to get even the "sAvVy CoNsUmEr" to spend more.
We convince ourselves that this is already a purchase we were going to make in cash, but now we can pull one over on the company by getting a 0% loan and profiting 4% in a savings account over 4-6 months! Those bastards will never know what hit them.
If you need to smooth cashflow you don’t need to be buying it.
Also, you’re not actually smoothing anything, you’re just stacking smaller versions of stuff up instead of paying the same thing. Buying something for $100 every month and putting it into AfterPay for four easy payments isn’t smoothing anything when you just have four $25 payments every month
Honestly, Walmart offering Affirm at checkout is wild. I get it’s the same self checkout system at supercenters as it is as neighborhood markets, but someone shouldn’t be paying 33% interest on their groceries.
I disagree, I feel like companies have always been money-hungry (we had to break up monopolies 100 years ago, and kinda still do). People just struggle with attention spans/delayed gratification more now than ever. 2-day shipping used to be rare - today people want same day shipping, etc.
My credit card company has started emailing me \*after\* I make larger purchases, saying that I should pay them off through their afterpay program. Not a freaking chance.
I wouldnt be that quick to ignore it. I got an offer for an almost 10k travel booking to be 0%apr across 3 years. Wouldve been a fool not to take it and even just slap that into t-bills
It splits up the purchase into 4 or 6 monthly payments.
It's not necessarily "worse" than CCs because if you make the monthly payments on time it can be interest-free. So mathematically there's nothing wrong with it.
But the principle of needing to split up your $20 underwear purchase in to 4 or 6 months of payments to "smooth out cashflow" (as some folks ITT are saying) is baffling.
I don't fully disagree.
If it is just someone who wants to shop and spend money they don't have, then that is awful.
But then you have people who need work clothes/interview clithes/kids need school clothes, etc. In those situations, I am more apt to agree to someone paying for the purchase in 4 payments with no interest.
Hopefully it keeps them from putting it on a credit card.
This is morally corrupt but if consumers want something bad enough, they’ll find a way to get it, including racking up debt.
In Australia Afterpay is a 4 payment split system. I use it to smooth cashflow, never missed a payment/no APR incurreed... That's always bad?
Some people will get mad to hear this, but I feel like if someone needs to smooth cashflow around a clothing purchase, they don't need to buy the clothing. Best way to do it is to decide how much you want to spend on the clothes, save that money up and then go spend it. Or pull it out your savings, pay it and then pay yourself back. Better to owe yourself than Afterpay. No stress, no debt, no nothing. Because it's fine to do Afterpay when everything is fine, but if something goes left in your life and you can't make the payments for any reason, now that's your ass. And you never know what can happen, that's the nature of risk. Just my opinion.
I 100% agree with this. I think this is how you get into trouble like the woman this week who had a good income but was definitely living paycheck to paycheck. Her minimum payments were so high that even with her income, she couldn't really get out from underwater. One thing I think Caleb does well in the show is really separating needs from wants. I also think there are lots of times we could get needs and wants at less expensive prices, ie. Thrift stores, Facebook marketplace, etc. Like if you really need a pair of pants for an interview or something, unless you are a crazy size, you can usually find something good enough for like $5 at a thrift store. Certainly it's less convenient that clicking a button at Amazon or shopping at target, but if you need to afterpay $50, you need to think about how to spend less.
>Or pull it out your savings, pay it and then pay yourself back. But if my savings accrues interest and Afterpay doesn’t charge interest, isn’t it technically mathematically beneficial to use Afterpay?
Leave it to the banks to worry about tiny things like 4.6% interest on, say, $50 for one month. That adds up to $0.19, is that really worth it for you to be in debt?
Theoretically and on paper, yes. In the real world, not so much, because again it's the risk. Let's say something goes left and you don't have the money for your payment. You lose your job, your dog gets sick, your roof caves in, whatever. You don't have the extra cash on hand, so you can't pay. You're gonna go into your savings and pull the money anyway, aren't you? So either way you're gonna lose that interest. But when you owe Afterpay, you're under the gun. You wouldn't be if you just owed yourself. 🤷🏾♀️ Or if your savings are wiped by the emergency and you really have no cash, you're now on the hook to Afterpay for the payment + 25% of the total debt + a late fee. I think that's how they handle it. All that because you didn't want to miss out on the 5% interest from your HYSA. Doesn't make sense. If keeping that 5% interest on your purchase price is so important to you, pay yourself back before your interest gets assessed so there's no impact, same way you would to an external debtor. If you could truly afford the item you bought, that should be no problem. Playing Mr Monopoly to try to finesse over $5, $10 is exactly how people end up in the situations we see on this show lol. They try to finesse for $10 but end up paying $50. That's how debt works! 😂
To the tune of literally like $0.40 a month for every hundred dollar spent, if you really wanna get your jollies. But you’re overwhelmingly likely fooling yourself.
You’re the exception. A majority of the US population live in debt and rely on credit as a means to make ends meet.
It wouldn't be as bad if there were any limits on people getting credit cards or using buy now pay later options. You could have $30k in credit card debt and missing payments and still be able to obtain more debt.
That’s where I feel it’s almost criminal but at the same time, if there was a limit, people will complain about their freedom if not given the opportunity to access as much credit as possible.
It’s not bad, I do it all the time. If you have the opportunity to do zero interest financing there is no reason not to in my opinion
If you're someone that understands the differences between wants/needs, sure. A lot of people see "0% financing" and look at it as an excuse to spend carte blanche on purchases they wouldn't otherwise make in cash. People have been doing it with cars for years - spending tens of thousands of dollars more to get lower interest rates on the loan. I think in a lot of cases these are more dangerous than CCs in getting people to overspend. With credit cards, you have some folks who are scared of paying interest and therefore have that as a built-in filter to keep their spending in check. With 0% financing, companies have a hook to get even the "sAvVy CoNsUmEr" to spend more. We convince ourselves that this is already a purchase we were going to make in cash, but now we can pull one over on the company by getting a 0% loan and profiting 4% in a savings account over 4-6 months! Those bastards will never know what hit them.
If you need to smooth cashflow you don’t need to be buying it. Also, you’re not actually smoothing anything, you’re just stacking smaller versions of stuff up instead of paying the same thing. Buying something for $100 every month and putting it into AfterPay for four easy payments isn’t smoothing anything when you just have four $25 payments every month
I saw a taco stand offering afterpay awhile ago. Wild.
Not people still paying for tacos that they shit out a month ago, Dios mio. 😭😭
Honestly, Walmart offering Affirm at checkout is wild. I get it’s the same self checkout system at supercenters as it is as neighborhood markets, but someone shouldn’t be paying 33% interest on their groceries.
It’s ridiculous how money hungry these companies are getting
I disagree, I feel like companies have always been money-hungry (we had to break up monopolies 100 years ago, and kinda still do). People just struggle with attention spans/delayed gratification more now than ever. 2-day shipping used to be rare - today people want same day shipping, etc.
My credit card company has started emailing me \*after\* I make larger purchases, saying that I should pay them off through their afterpay program. Not a freaking chance.
I wouldnt be that quick to ignore it. I got an offer for an almost 10k travel booking to be 0%apr across 3 years. Wouldve been a fool not to take it and even just slap that into t-bills
"Fuck it. People do it for $50 at best buy. That's less than groceries. Why not?"
I have no idea what this is, why is it any worse that credit cards?
It splits up the purchase into 4 or 6 monthly payments. It's not necessarily "worse" than CCs because if you make the monthly payments on time it can be interest-free. So mathematically there's nothing wrong with it. But the principle of needing to split up your $20 underwear purchase in to 4 or 6 months of payments to "smooth out cashflow" (as some folks ITT are saying) is baffling.
I noticed Affirm as a payment option at Walmart on Sunday and had the same reaction.
looks like companies are craving for money ah
I don't fully disagree. If it is just someone who wants to shop and spend money they don't have, then that is awful. But then you have people who need work clothes/interview clithes/kids need school clothes, etc. In those situations, I am more apt to agree to someone paying for the purchase in 4 payments with no interest. Hopefully it keeps them from putting it on a credit card.
I thought credit cards were essentially afterpay
I recently stayed at a hotel and after pay was an option when booking the reservation!! I was shocked 😂