Monzo reportedly launching Buy Now Pay Later product

UK Monzo Chat
1

Monzo entering the BNPL space.
Are they too late or is this the move we were all waiting for?

Monzo in the Media šŸ“°
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Personally i how they avoid this. BNPL isnā€™t good for your credit score and companies that offer it have bad reputations.

Save up instead. It will take the same amount of months and you will enjoy what you bought more because of the work you put into it

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BNPL has been around for ages. The only thing that has change is the consumer behavior.
Back when I was a student I bought my first laptop with BNPL from the bank because I couldnā€™t afford it to pay the lump sum immediately.
I get the fact that nowadays, youngsters are using for ASOS and others. But thatā€™s not a BNPL issue It is a consumer behavior and educational issue.

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6

Why wait?

I understand if youā€™re paying 1473% interest but lots of them are interest free.

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Iā€™m a big user of Klarna, find it easier to manage money using then, and there is a really simple dashboard within the app to see what your situation is at the time.

Sensible move from Monzo to go here

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8

Sadly, taking credit is generally good for your ā€˜credit scoreā€™.

Not that it matters because your credit score doesnā€™t tell you a lot about what you can or canā€™t borrow in different circumstances

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9

Are they? Have I missed something?

Edit: article here - Monzo wades into booming buy now, pay later market

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10

Itā€™s all interest free until you end up with loads of them and you over run yourself and your take home pay has gone. Pay for things with your own money is what I have always been brought up to believe and still do now.

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13

Then donā€™t do that then

I use them all the time, itā€™s just easier

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How are you going to buy a house? Or expensive car?

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15

TouchƩ

Mortgages and Loans are not BNPL to be fair. And you can only have so many of them. They are limited edition borrowing.

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16

Itā€™s a matter of perspective I guess. The reason I donā€™t use them is they are there - like lots of things - to encourage you to buy more things overall. And they tend to work well on that.

I know my own behaviour to know that if I bought things on finance I would buy more stuff, so I donā€™t do it. People can make their own judgement, I guess, but everyone should have their eyes open in that ā€˜free creditā€™ often has a cost.

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Is this the new credit pot thing weā€™re expecting or something else?

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In general they donā€™t report to the credit bureau. This is one of the things that came out of the Woolard Review from the FCA.

Theyā€™re going to need to start reporting in the near future.

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21

I donā€™t see a massive difference between them and a credit card, which is designed to essentially be ā€œhere, buy this now and pay us back laterā€.

With some tweaks in regulation they can provide a way for people to get medium priced goods that they might otherwise have had to save up for over 2/3 months.

They arenā€™t designed for constant shopping sprees and buying more than you can reasonably afford over time.

Iā€™ve used a few, and only ever one item at a time. Could I have saved up over 3 months for my Nintendo? Sure. Was I fine with paying for it interest free over 3 months so I could have it now and not pay any extra? Why not!

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My father was an accountant and itā€™s thanks to his advice over the years that Iā€™ve been able to retire early. However, if ever he could get anything interest-free over a few months, he would. That was mainly due to savings interest rates being a lot higher then so you could earn interest on the money that you would have otherwise spent in one lump sum.

Itā€™s a habit that has stayed with me, even though interest rates are pathetically low at the moment :slight_smile:

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23

Has anything been said to prompt this topic or is it just continued guesses from last time?

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It also gives you that extra spending power incase something happens where you need that money and paying later isnā€™t an option.

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28

Again I think this is a slightly rose tinted view of credit products. There are always reasons to use them and to not use them. Letā€™s not pretend that credit is some consequence-less thing that is only of benefit to the consumer- it really is isnā€™t.

Itā€™s there to make you spend more. If you can resist or manage that, thatā€™s great, lots of people canā€™t though. I know you were talking about your own situation, still, I think itā€™s good to keep to language that doesnā€™t encourage credit use.

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Theyā€™ve discovered credit pots then