If I buy something for £500 on my credit card, I’ll know I have to be able to pay that £500 off in full at the next statement date (because I never pay interest).
But with Flex I can split that £500 into 3 payments, interest free, so it makes it more manageable and easier to overspend. And if you’re not careful then you can end up with a lot of those payments adding up into more than you can afford in one month.
(Not saying this is a problem for me, but can see how it happens)
For me, it’s the other way around.
I’d say I was going to pay off £500 but I’d pay off £200, roll it, add some interest and probably spend again next month, which is how I ended up with a chunky balance.
Flex (so far, so good) has kept me more regimented at paying it in 3 or sooner.
I’m team Ethan on this one, sorry revels! (Still rooting for you in the battle of the Dan tho)
The flex approach is both simultaneously easier to snowball, and can invoke a bit of sensory overload. One small miscalculation can snowball very quickly into something insurmountable. And in those situations because of the way it works, and can be seen as a useful tool to get out of it too which could actually wind up doing the opposite, making it harder to get under control. One thing they could improve to mitigate some of this would be to always deduct ad hoc payments off your upcoming payment regardless of how you pay it.
I think the credit card simplicity is much better at preventing this sort of situation, but I’m assuming there’s no reason other than user error that could attributing to the snowball effect.
Love this, and think it’s so true.
Credit creates extra bills, administration, and complexity. The flip side is that it lets you have things that you can’t afford. There are times where this is genuinely useful (mortgage for a house, loan for a car that gets you to work, unexpected bill for something essential, etc), but the vast majority of BNPL purchases don’t fall into these categories. The result, I think, is that regular use of credit/BNPL makes people less aware of their assets and liabilities, less able to judge affordability of purchases, and less in control of their finances.
The more someone needs credit, the more important it is for them to use it carefully. Casual BNPL is not a good thing.
I agree with this and am slightly surprised it doesn’t exist.
Most other forms of credit (i.e credit cards) have this option
Does Flex work for hotels, petrol pumps, car rentals etc. that apply pre-authorisation?
I’ve used Flex through Curve at pay at pump and it worked fine, £120 out, soon amended to fuel purchased amount.
So it’s likely the physical will work the same. Not able to comment about hotels etc but can’t imagine its any different in terms of pre Auth or hold.
Will we ever lose the £3 min payment thing?
Would make sense as Flex becomes more and more like a traditional CC.
I didn’t think there was a minimum payment now? Minimum of £x to Flex it but can’t you use the credit card for below that and pay off immediately?
Sorry, I meant the £3 due each month minimum. Unless of course transaction is less than £3.
IE I buy £10 something’s. The lowest I can repay is £3, £3, £3, £1 over the 4 months.
No, we want the product to be able work for a range of use cases (and many of the recent and upcoming product changes have been with that in mind) however we do still want the product to have some positive friction to discourage unhealthy usage. We think the situations where spreading a £10 payment over more than 4 months would be considered “healthy” to be really rare so the £3 minimum is something we definitely want to keep.
If I want to pay off extra, but it’s more than the final payment, can you do that? And where does the excess go?
Eg £3k on Flex, £1k a month, I want to pay off £1500. Does it remove the final payment and then half the penultimate one?
Yes, that’s what it does
Oooooh. This is quite amazing.
As a complete newbie, when should I expect my Flex notification to pick a plan? I for some reason thought it would be straightaway?
I usually get a notification immediately as the card payment is processed.