[nikkev]

There are two types of BNPL loans: interest free and short-term interest-bearing accounts. In theory BNPL has a couple interesting advantages. First you're underwriting each individual purchase whereas a credit card involves underwriting a line of credit to a consumer. This enables BNPL providers to charge different prices depending on the product being purchased, for example someone making 2,000 a month trying to buy a 1,200 phone may warrant a higher interest rate. Also given the shorter term they should be able to better optimize their rates versus a credit card which is a pre-approved rate across the entire line of credit.

[itake]

> for example someone making 2,000 a month trying to buy a 1,200 phone may warrant a higher interest rate.

Why would the interest rate be different from someone making 2,000 a month trying to buy 1,200 $1 widgets?