Klarna brags to businesses that offering their app will increase the average store order by 45%. That means that the average shopper is spending 45% more—for things they can’t afford—all because they don’t have to pay for it all at once. That’s messed up!
It is NOT about people who can't afford food, it is about psychologically manipulating you into overspending and it works on so many people that the handful who it doesen't work on are just the tiny exception.
And that in a world that can only survive if we consume less.
Thank for sharing this. You are so correct. There’s also social pressure to belong to these subscription services and paying added fees to “fit in”. I mean, if you’re struggling financially AND you’re paying for a Prime membership, you should reconsider your spending habits.
While it's probably true that people spend more than they otherwise would (otherwise this wouldn't be such a huge thing), that doesn't follow from Klarna's marketing figure of 45% higher spend per order. It is totally possible that people order more at once but less often. Especially for groceries, buying in bulk is often much better value, but it can be impossible if you just don't have the cash around.
It's almost like we have no money and don't have a choice because having ridiculous luxury items like FOOD, requires you know, money.
Just uh, stop being a poor!
Problem solved.
It's not that difficult! Just borrow a few millions from your parents, and become CEO of your own company.
I legit had an acquaintance ask me why I don't just ask my dad to buy me a house and get into real estate investing.
Well, what was your excuse?
S/
Rent some boot straps!
Try being born right next time sucker!
Jokes on me for not selecting "easy mode" on the start screen I guess.
Cost of rent is such a con. It continues to rise and been proven to be manipulated by software (RealPage). Then shrinkflation.. and inflation.. cost of energy. Cost of insurance. Literally everything. EXCEPT the one thing which SHOULD go up: wages.
But hey, corporations can just bake bread and be exempt from minimum wage increases; California and Panera, though they got in so much hot water it was backtracked… but holy fuck that’s the shitty weasel way of corps.
Don't you just love rent/housing? Oh, sorry you don't make enough money to qualify for a mortgage. But hey you can pay $1,500/month+ to pay your landlord's mortgage!
Housing is a human right. Housing for all!
let's lynch the landlord!
"people are too poor to afford to eat, come observe as we try and reframe this as a quirky habit of a younger generation instead of hilighting the fracturing of society as a whole!"
she suffers with a smile
Yes, I definitely volunteered to get an interest free loan on my groceries. It absolutely had nothing to do with my inability to pay in full immediately
From a purely mathematical perspective, if you are a perfectly rational consumer you would put everything on an interest-free buy-now-pay-later plan and then squirrel the money into a high-yield savings account, then pocket the interest.
That's actually what I do lol. Unfortunately, I live paycheck to paycheck, so it only makes me around $10/month, but hey, it's something.
You get $10 of interest per month on a month's expenses?
$5-10. I have no idea how they calculate average balance for the month, but the good news is that I'm very, very slow saving money.
Don't fuck up. Seriously. These products exist because, on average, they make money. They make money because, on average, people fuck up.
But listen to our fun jingle!
Isn't is nifty to get into debt before your brain has fully developed!
This is yet another massive sign of an oncoming recession in the next 6-12 months. Inverted yield curve, more part time jobs, layoffs, commercial real estate collapse, etc.
In September 2024 student loan payments start back up. They're semi on pause if you have financial hardship, interest still accrues. 45,000,000 people with student loan debt.
That adds another one to the list. Unfortunately I don't see a way we avoid a recession into 2025. It's basically inevitable at this point given the conditions.
I thought they started already? I've been getting statements since October '23
October '23 was the official end of the moratorium. I believe unless you were able to prove financial hardship, everyone restarted their payments. However, when those payments did resume, there were immediate defaults.
Commercial real estate collapse you say? I'm listening...
A lot of the knee-jerk reactions reek of avocado toast and bootstraps against The Youths™ and the article starts off a bit as living beyond your means, I shook my cane and felt it too reading the headline at first.
But honestly, think about how these financing options are smoothing out paychecks for young people and low income folks, giving them more of a buffer in actual cash to deal with day to day stuff that might not be covered by these services. And anything that can put the screws to credit card late fees and interest and the fucking scumball payday loan industry is absolute tits IMO.
I remember being poor and hungry early in life.. absolutely would have taken advantage of predictable lower payments on as much as possible just to have more cash around because I knew just how likely it was to try cranking my junker of a car one morning and realize I'm walking to work for the next few paychecks.
predictable lower payments on as much as possible just to have more cash around
It doesn't give you "more cash". You are borrowing money and interest is definitely baked into it. Credit cards already let you borrow money for a month for free. Plus they have cash back / points and great fraud protection. Plus they help you build your credit score.
You can get a basic credit card for $0 per year with a low limit, even if you have no credit. Don't ever use "pay later" shit. Why do you think they invented it? It's better for them, not you.
I mean the one time I used one of these "pay in four payments" kind of things there was no interest added on. It just let me split up the cost easier rather than having to do it all at once and subsist on very little till I get money next.
I bought a fridge with a 3 month scheme when I was broke enough that a new fridge would've been the end of that month's money. Zero interest.
Don't think I'll ever finance a pizza over 4 payments like some other comment said though. Unless it's my last pizza before I decide to stop existing or something.
I think it overall is a bad habit to get into, just like credit cards for some people, but could be a good thing if your very smart about the way you use it. npr did an interesting piece on the origins and motivations of buy now pay later a couple years ago here if anyone wants to learn about it:
https://www.npr.org/2022/05/10/1097885472/buy-now-pay-dearly
How old are Gen Z kids? 12-26 years old? Man, I was broke as shit from 12-26 too. Didn't even have avocado toast money.
Poor man buys boots biyearly, rich man buys boots once. Guess who pays more?
This comment is just dripping with boot licker spit
So now they've made it easier to go in debt for lunch
I dunno, the way the world is hurling to a climate catastrophe. Money isn't going matter. This is just smart financial planning.
2008 will be just a little slump compared to the upcoming crash. hope this time we'll end up with a "burn down the wall street" movement, not "occupy wall street"
Burn down the gdp and everyone's current retirement money? Great idea.
Wall street forced this entanglement to make themselves look valuable. We need to disentangle from their bullshit.
GDP is fake and moneyless tribal societies were able to invent mechanisms of caring for the elderly sometimes more considerate than what industrialized societies have
I really thought these companies would get slaughtered by interest rates, fraud, and young people just never making the payments.
Capitalism has been a resounding success, hasn't it?
Every system must be tried and taken to the extreme where it eventually crashes and gets replaced. It's the nature of things.
As a socialist, I'm still waiting for it to be tried.
I mean, the average human is better off than they've ever been largely due to profit driven innovation. So in that sense yes it has been. But yeah obviously capitalism will continue to slowly eat us alive unless we take control of it and better direct it's benefits at everyone instead of just a few.
I don't know the difference between this and using a credit card? You can extend payment using a CC, are the interest rates that much lower?
BNPL generally has a fixed payment schedule, while CC does not. It's entirely feasible to use a CC and never pay interest by paying debts immediately (because you have cash liquidity). At that point, a CC becomes more of a low-friction "accounts payable" system for consumers than a financing scheme.
BNPL's primary value is in making large purchases because of low cash liquidity. When consumers don't have enough cash liquidity for FOOD, that's a sign of bad times.
Or it means people are leveraging low interest loans to gamble their lunch money. Still not a good look.
Not much difference, but it’s usually fairly predatory.
It’s not that it’s a fairly new thing- it’s that people are having to do it for necessities. Which just makes everything more expensive as your (probably) now on a credit treadmill.
I saw a youtube video yesterday about a bank executive explaining banks in a humorous way, and the best line was
"you don't need to afford the item, you need to afford the interest payments OF the item"
He’s not wrong, but this comes off as “it’s only a banana Michael”. If he’s talking about a house, then yes. If he’s talking about groceries, that adds up quickly. Don’t just pay interests on everything.
How do you finance something for longer than a week that you need to buy every week?
What's the interest payment/cost for this kinda service? I've fortunately never been in a position to need it.
Usually interest free for 3 or so months. Pay 1/3 a month.
Ahh, okay. So a financial gun pointed to your head. This has certainly no chance of going awry.
When I used to work at a Best Buy subsidiary, it was free for the 3 or 12 months..... but if not fully paid by the end of term, you got walloped with the full interest on the whole value. It was like 28.9% APR too.
People would routinely finance thousands of dollars in Christmas presents and would actually get furious, screaming at me or others if they weren't approved for the amount they applied for. One woman was screaming that it was my fault and I just couldn't help myself and replied along the lines of 'nah bitch, you're just broke. We're hiring for the holidays though' cue an epic Karen episode...... later my manager told me that's not how I'm supposed to get a referral bonus LoL. He was a good guy.
Most of them no interest 4x payments every other week...
Some offer longer terms with interest though
Little or nothing if you make the payments.
If you miss a payment, the rates go sky high.
I've used affirm a few times in the past for larger purchases. So I bought a $600~ table saw and you pick the length of the loan in months 3/6/12 whatever. I didn't get whatever months interest free but the interest didn't seem too crazy. It was like a couple of bucks every month and if you pay it off early you don't have to pay the rest of the interest. It's convenient for the purposes that I use it for. I'm really glad that I've not been in a position to need it for groceries.
"Payment Plans" can be set up on credit card charges with TD Canada for 6, 12, 18 months... where you have to pay 4%, 6%, 8% of the charge as interest, which works out to 8%, 6%, and 5.33% per annum respectively.
Welcome to the company store where you can buy today's necessities with debt against future wages.
I've never used one of these payment things because I've never needed them, but I've always found it funny when it offers to do it on a really cheap item. Like if you have to pay $60 in 3 monthly payments then you may not need that item.
I've used PayPal in 4 a couple of times.
Budgeting pretty hard, sometimes it's easier to spread the load out over 4 weeks for something that would eat my whole weekly personal spendings in one swoop.
I use PayPal's financing options but they are usually for larger purchases.
Interesting free financing is basically a loan with the current interest rates and inflation.
I just want to say this is the default in brazil for poor people to get things they need fast, but it's more of a thing for buying a fridge, or a phone, but food? Things are getting serious it seems.
It might now be the most common thing to use it for food in Brazil, but I've even seen pizza ads offering to finance a pizza in 4 installments.
I am curious how much of this is just ease, like why pay upfront if I can get a 0 interest "loan" as long as I pay it off prior to any interest charges, can be problematic if you don't have the income to pay for it of course.
How is buy now pay later “niche”? There’s literally a scene in the bible about this practice. People have been buying things on credit for longer than money has existed.
The NBC article is not telling you this:
Source: https://www.ramseysolutions.com/debt/klarna
It is NOT about people who can't afford food, it is about psychologically manipulating you into overspending and it works on so many people that the handful who it doesen't work on are just the tiny exception.
And that in a world that can only survive if we consume less.
Thank for sharing this. You are so correct. There’s also social pressure to belong to these subscription services and paying added fees to “fit in”. I mean, if you’re struggling financially AND you’re paying for a Prime membership, you should reconsider your spending habits.
While it's probably true that people spend more than they otherwise would (otherwise this wouldn't be such a huge thing), that doesn't follow from Klarna's marketing figure of 45% higher spend per order. It is totally possible that people order more at once but less often. Especially for groceries, buying in bulk is often much better value, but it can be impossible if you just don't have the cash around.
Dave Ramsey though?? Ugh. Double ugh. Triple ugh.
It's almost like we have no money and don't have a choice because having ridiculous luxury items like FOOD, requires you know, money.
Just uh, stop being a poor!
Problem solved.
It's not that difficult! Just borrow a few millions from your parents, and become CEO of your own company.
I legit had an acquaintance ask me why I don't just ask my dad to buy me a house and get into real estate investing.
Well, what was your excuse?
S/
Rent some boot straps!
Try being born right next time sucker!
Jokes on me for not selecting "easy mode" on the start screen I guess.
Cost of rent is such a con. It continues to rise and been proven to be manipulated by software (RealPage). Then shrinkflation.. and inflation.. cost of energy. Cost of insurance. Literally everything. EXCEPT the one thing which SHOULD go up: wages.
But hey, corporations can just bake bread and be exempt from minimum wage increases; California and Panera, though they got in so much hot water it was backtracked… but holy fuck that’s the shitty weasel way of corps.
Don't you just love rent/housing? Oh, sorry you don't make enough money to qualify for a mortgage. But hey you can pay $1,500/month+ to pay your landlord's mortgage!
Housing is a human right. Housing for all!
let's lynch the landlord!
"people are too poor to afford to eat, come observe as we try and reframe this as a quirky habit of a younger generation instead of hilighting the fracturing of society as a whole!"
she suffers with a smile
Yes, I definitely volunteered to get an interest free loan on my groceries. It absolutely had nothing to do with my inability to pay in full immediately
From a purely mathematical perspective, if you are a perfectly rational consumer you would put everything on an interest-free buy-now-pay-later plan and then squirrel the money into a high-yield savings account, then pocket the interest.
That's actually what I do lol. Unfortunately, I live paycheck to paycheck, so it only makes me around $10/month, but hey, it's something.
You get $10 of interest per month on a month's expenses?
$5-10. I have no idea how they calculate average balance for the month, but the good news is that I'm very, very slow saving money.
Don't fuck up. Seriously. These products exist because, on average, they make money. They make money because, on average, people fuck up.
But listen to our fun jingle!
Isn't is nifty to get into debt before your brain has fully developed!
This is yet another massive sign of an oncoming recession in the next 6-12 months. Inverted yield curve, more part time jobs, layoffs, commercial real estate collapse, etc.
In September 2024 student loan payments start back up. They're semi on pause if you have financial hardship, interest still accrues. 45,000,000 people with student loan debt.
That adds another one to the list. Unfortunately I don't see a way we avoid a recession into 2025. It's basically inevitable at this point given the conditions.
I thought they started already? I've been getting statements since October '23
October '23 was the official end of the moratorium. I believe unless you were able to prove financial hardship, everyone restarted their payments. However, when those payments did resume, there were immediate defaults.
Commercial real estate collapse you say? I'm listening...
https://www.businessinsider.com/commercial-real-estate-crash-property-price-drop-defaults-interest-rates-2024-1
A lot of the knee-jerk reactions reek of avocado toast and bootstraps against The Youths™ and the article starts off a bit as living beyond your means, I shook my cane and felt it too reading the headline at first.
But honestly, think about how these financing options are smoothing out paychecks for young people and low income folks, giving them more of a buffer in actual cash to deal with day to day stuff that might not be covered by these services. And anything that can put the screws to credit card late fees and interest and the fucking scumball payday loan industry is absolute tits IMO.
I remember being poor and hungry early in life.. absolutely would have taken advantage of predictable lower payments on as much as possible just to have more cash around because I knew just how likely it was to try cranking my junker of a car one morning and realize I'm walking to work for the next few paychecks.
It doesn't give you "more cash". You are borrowing money and interest is definitely baked into it. Credit cards already let you borrow money for a month for free. Plus they have cash back / points and great fraud protection. Plus they help you build your credit score.
You can get a basic credit card for $0 per year with a low limit, even if you have no credit. Don't ever use "pay later" shit. Why do you think they invented it? It's better for them, not you.
I mean the one time I used one of these "pay in four payments" kind of things there was no interest added on. It just let me split up the cost easier rather than having to do it all at once and subsist on very little till I get money next.
I bought a fridge with a 3 month scheme when I was broke enough that a new fridge would've been the end of that month's money. Zero interest.
Don't think I'll ever finance a pizza over 4 payments like some other comment said though. Unless it's my last pizza before I decide to stop existing or something.
I think it overall is a bad habit to get into, just like credit cards for some people, but could be a good thing if your very smart about the way you use it. npr did an interesting piece on the origins and motivations of buy now pay later a couple years ago here if anyone wants to learn about it: https://www.npr.org/2022/05/10/1097885472/buy-now-pay-dearly
How old are Gen Z kids? 12-26 years old? Man, I was broke as shit from 12-26 too. Didn't even have avocado toast money.
Poor man buys boots biyearly, rich man buys boots once. Guess who pays more?
This comment is just dripping with boot licker spit
So now they've made it easier to go in debt for lunch
I dunno, the way the world is hurling to a climate catastrophe. Money isn't going matter. This is just smart financial planning.
I sincerely hope this is sarcasm
2008 will be just a little slump compared to the upcoming crash. hope this time we'll end up with a "burn down the wall street" movement, not "occupy wall street"
Burn down the gdp and everyone's current retirement money? Great idea.
Wall street forced this entanglement to make themselves look valuable. We need to disentangle from their bullshit.
GDP is fake and moneyless tribal societies were able to invent mechanisms of caring for the elderly sometimes more considerate than what industrialized societies have
I really thought these companies would get slaughtered by interest rates, fraud, and young people just never making the payments.
Capitalism has been a resounding success, hasn't it?
Every system must be tried and taken to the extreme where it eventually crashes and gets replaced. It's the nature of things.
As a socialist, I'm still waiting for it to be tried.
I mean, the average human is better off than they've ever been largely due to profit driven innovation. So in that sense yes it has been. But yeah obviously capitalism will continue to slowly eat us alive unless we take control of it and better direct it's benefits at everyone instead of just a few.
I don't know the difference between this and using a credit card? You can extend payment using a CC, are the interest rates that much lower?
BNPL generally has a fixed payment schedule, while CC does not. It's entirely feasible to use a CC and never pay interest by paying debts immediately (because you have cash liquidity). At that point, a CC becomes more of a low-friction "accounts payable" system for consumers than a financing scheme.
BNPL's primary value is in making large purchases because of low cash liquidity. When consumers don't have enough cash liquidity for FOOD, that's a sign of bad times.
Or it means people are leveraging low interest loans to gamble their lunch money. Still not a good look.
Not much difference, but it’s usually fairly predatory.
It’s not that it’s a fairly new thing- it’s that people are having to do it for necessities. Which just makes everything more expensive as your (probably) now on a credit treadmill.
I saw a youtube video yesterday about a bank executive explaining banks in a humorous way, and the best line was
"you don't need to afford the item, you need to afford the interest payments OF the item"
He’s not wrong, but this comes off as “it’s only a banana Michael”. If he’s talking about a house, then yes. If he’s talking about groceries, that adds up quickly. Don’t just pay interests on everything.
How do you finance something for longer than a week that you need to buy every week?
What's the interest payment/cost for this kinda service? I've fortunately never been in a position to need it.
Usually interest free for 3 or so months. Pay 1/3 a month.
Ahh, okay. So a financial gun pointed to your head. This has certainly no chance of going awry.
When I used to work at a Best Buy subsidiary, it was free for the 3 or 12 months..... but if not fully paid by the end of term, you got walloped with the full interest on the whole value. It was like 28.9% APR too.
People would routinely finance thousands of dollars in Christmas presents and would actually get furious, screaming at me or others if they weren't approved for the amount they applied for. One woman was screaming that it was my fault and I just couldn't help myself and replied along the lines of 'nah bitch, you're just broke. We're hiring for the holidays though' cue an epic Karen episode...... later my manager told me that's not how I'm supposed to get a referral bonus LoL. He was a good guy.
Most of them no interest 4x payments every other week...
Some offer longer terms with interest though
Little or nothing if you make the payments.
If you miss a payment, the rates go sky high.
I've used affirm a few times in the past for larger purchases. So I bought a $600~ table saw and you pick the length of the loan in months 3/6/12 whatever. I didn't get whatever months interest free but the interest didn't seem too crazy. It was like a couple of bucks every month and if you pay it off early you don't have to pay the rest of the interest. It's convenient for the purposes that I use it for. I'm really glad that I've not been in a position to need it for groceries.
"Payment Plans" can be set up on credit card charges with TD Canada for 6, 12, 18 months... where you have to pay 4%, 6%, 8% of the charge as interest, which works out to 8%, 6%, and 5.33% per annum respectively.
Welcome to the company store where you can buy today's necessities with debt against future wages.
I've never used one of these payment things because I've never needed them, but I've always found it funny when it offers to do it on a really cheap item. Like if you have to pay $60 in 3 monthly payments then you may not need that item.
I've used PayPal in 4 a couple of times.
Budgeting pretty hard, sometimes it's easier to spread the load out over 4 weeks for something that would eat my whole weekly personal spendings in one swoop.
I use PayPal's financing options but they are usually for larger purchases.
Interesting free financing is basically a loan with the current interest rates and inflation.
I just want to say this is the default in brazil for poor people to get things they need fast, but it's more of a thing for buying a fridge, or a phone, but food? Things are getting serious it seems.
It might now be the most common thing to use it for food in Brazil, but I've even seen pizza ads offering to finance a pizza in 4 installments.
I am curious how much of this is just ease, like why pay upfront if I can get a 0 interest "loan" as long as I pay it off prior to any interest charges, can be problematic if you don't have the income to pay for it of course.
How is buy now pay later “niche”? There’s literally a scene in the bible about this practice. People have been buying things on credit for longer than money has existed.