[wyuenho]

Just because you are financing, doesn’t mean you are buying things with money you don’t have, only financially illiterate people of a particularly dim nature would say that.

There are plenty of reasons to delay paying for things as much as possible, especially if the financing has zero cost. Say you bought a new £800 stand mixer on Black Friday. Splitting the costs in 3 allows you to deploy the funds elsewhere, such as investing in an index fund, buying bonds or put into a CD account or anything productive to offset some of the cost or if you are lucky, cover it. A dollar today is not the same as a dollar tomorrow.

Another common reason for that is to stretch your credit limit without affecting your credit score. Say your credit card has a £30k credit limit. There is an expensive 4-5 figure gift you want to buy for your girlfriend for Christmas or take an expensive holiday to some exotic location. You can afford it, but it’s going to cost a few months’ salary and a dip in your credit score. You can pay for your purchase with BNPL without leaving you nothing at the end of the next few months and have no impact on your credit score.

BNPL is a great financial buffer for everyone, as long as you have some baseline discipline to pay off what you owe.

[barbazoo]

> ay you bought a new £800 stand mixer on Black Friday. Splitting the costs in 3 allows you to deploy the funds elsewhere, such as investing in an index fund, buying bonds or put into a CD account or anything productive to offset some of the cost or if you are lucky, cover it.

Those 0% financing offers only exist because interest rates are extremely low. I don't know about others but you know what else is low these days? The return on my index funds. If I invest those £800 now, I miss out on what, £8 over the course of a year? Compounding that makes very little difference at retirement age but for many of us, the mental overhead to manage these loans and the chance of taking on too much (interest rates will go up again) and making a mistake is just not worth it. Besides, if you BNPL you wouldn't want to park that money somewhere volatile anyway, an index fund, what if interest rates rise and you need that money all of a sudden but your index fund didn't gain anything. All of a sudden you lost money. Maybe I just don't get it, I'm happy to learn if there's a flaw in my thinking here.

[wyuenho]

So you buy a stand mixer, make a bunch of dough, bake some bread and sell them. Plenty of ways to offset the cost. The how is not important, the important thing is you can. The worst it can happen is you have to pay exactly the labeled price some 3 months later.

[barbazoo]

If you're a business, I get it. Most people that are being targeted here though wouldn't fall into that category.

> The worst it can happen is you have to pay exactly the labeled price some 3 months later.

What if you parked the money and it lost value as I described? I think that's a worse case. So this only works if you hold on to the money in a place where it's guaranteed to increase in value (but interest rates are low) in which case the only upside is to offset inflation but I don't see how that would make a significant difference. If you're a business, sure but not for an individual.

[wyuenho]

If you parked the money and it lost value, it doesn't matter, because that's only relative to everything other than the stand mixer you bought. The price of the stand mixer is fixed at the time of purchase, it doesn't go up as time goes by.

[barbazoo]

I don't get it. If you bought the mixer and paid for it a year later but a year later when you have to fork over the money and it's suddenly not 800 bucks anymore but, say 750, you need another 50 bucks. So you spent 850 instead of 800, no?

[wyuenho]

The amount of what you owe is fixed at the time of a 0% interest BNPL purchase, just like a real purchase. Even if the interest rate is not 0, it’s still fixed.

It’s not a margin account where you have to call it if the value dips too low over time.

What in such simple concept is so hard for you to understand?