| > Yes but who is going to pay you the 2% for the remaining 9 months?!?! Don't think of equalizing the terms by extending the BNPL. Think of equalizing the terms by shortening the CD. > You’re incorporating a theoretical (and unrelated to 2% credit card rewards) interest rate into your calculations. I could easily say a CD yields 10% and this is a 50% APR then. I'm not claiming that the ~8% interest rate is real. My calculations mean that if you can get that rate or better, then you should use 3-month BNPL, and if you can't, then you should use your credit card with 2% cash back instead. > EDIT: Maybe to help you think about this: this is a purchase loan. It is not a cash loan. You got $1k worth of goods for $1k dollars. You can make arguments about opportunity costs, but that’s different than the traditional concept of APR. I fail to see how that makes any difference. > what’s the APR of cash purchases? It's either the highest APR of any of your debt, if you have any, or the risk-free APR you could get from a savings account otherwise. |
Yes, by your logic it is literally an infinite APR. $200 numerator / 0 years denominator. Doesn’t that imply that maybe your formula has some holes in it and this is a fundamentally different transaction (a take rate rather than an interest rate) than what you’re characterizing it as?