Ah right, sorry that was very unclear I guess but I meant BNPL not credit cards
1 Like
š±š»āā:mega:
1 Like
Ah, makes sense! Saw ācredit cardā in the quote so thought you meant those
1 Like
the only sensible way to spend is to spend someone elseās money in the first instance
There are some transactions that canāt be done on credit cards (I think theyāre called ācash transactionsā), an example is when I paid for my hotel they took a deposit which made it a ācash transactionā and I got charged a ridiculous fee from my credit card company 
3 Likes
I donāt think Iāve ever been an industry source of anything, except maybe talking rubbish 
4 Likes
D-oh, how could I forget ācash and cash-like transactionsā as they like to call them! But surprised that a hotel deposit would count as oneā¦ was it a hotel chain? What card was it? I once didnāt have the card I booked with with me in France and they wanted to hold the full amount on my Amex ā it was just a preauth but worrying that it couldāve been counted as a cash transaction!
1 Like
That shouldnāt have been classed as a cash transaction (because it isnāt one). Did you try complaining about it? It could have been mislabelled by someone at some point
1 Like
I honestly find this line impossible to judge.
Obviously people have free will and autonomy. But then, we also know that if friction for buying things is reduced then many people will buy more. Some of those people will consequently get into financial trouble. Where is the line between personal responsibility, and corporate influence?
Gambling is a very similar debate. Yes, we all have free choice to go and gamble and many people do that without wasting too much. But that doesnāt fully exempt gambling companies or society in general from scrutinising what tools are being used to influence people into gambling.
Same here. I agree that thereās a large element of personal responsibility, and in general Iām not against offering BNPL schemes. But at the same time I donāt think itās as simple as āitās a personal choice so itās fineā
Thereās a big difference between gambling and BNPL later. Gambling is all about chance, with BNPL then you know what the terms are up front and exactly what you need to pay back and when.
Being a responsible lender is about a) not lending to people who canāt afford it (and bookies donāt do affordability checks and b) being responsible when somebodyās circumstances change.
6 Likes
Honestly, the chance element is an illusion when it comes to long term gambling. Still, I do take your point that it is more clear upfront what you are getting with a loan.
Clearly they are not exactly the same, and anyway I donāt think either are necessarily unethical. But I do think there are valid comparisons between the credit industry and the gambling industry. Both provide something that is useful but can lead to addiction and problems, therefore both have a responsibility.
To give an example, the payday loan industry was one that went far too far into encouragement and disadvantageous terms for me (and for many). Mortgages sit on the other end of the scale - generally highly vetted and used responsibility. Clearly BNPL sits somewhere in between. I think itās acceptable but, as a society we should be cautious about its affect on personal finances and step in if thereās an issue - which I wouldnāt rule out
But that can apply to any business model - should a car dealership selling a high powered car make sure theyāre selling it to somebody who is going to drive us responsibly? What about pubs which serve somebody who is already drunk? Fast food joints serving somebody who is already morbidly obese?
I donāt disagree with you that lenders should be responsible, and as you rightly say some pay day loan companies werenāt - but there also has to be an element of responsibility on the consumer too.
Somebody who takes out a pay day loan from an irresponsible lender isnāt entirely blameless just because the terms of the loan are unfavourable and in some cases punitive. (Please donāt misinterpret that though, lending should be a thoroughly regulated product, but some of the comments on here are a tad simplistic).
Iāve spoken before on here about how I struggled with my mental health and consequently got into a lot of debt. Whilst some of the lenders could have been more supportive, I signed up to the credit agreements and Iām the one who is ultimately responsible for the debt.
12 Likes
Yes indeed, I think we agree basically. Iām saying both the lender and the consumer have a responsibility and thereās a line to be drawn somewhere, people are going to differ on where to draw it.
It was a response to what I saw as the idea that sometimes comes up in various spheres that because thereās a personal choice involved, thereās no element or need for the industry to be responsible in the choices offered or how that choice is presented.
100%! I think sometimes as well the actual costs of lending should be clearer - one of the industries that I think does this well is car insurance. Whenever Iāve gotten quotes for car insurance the price difference between paying monthly and paying in full is really clear. The cost of borrowing often isnāt - an APR means very little to most people!
3 Likes
I donāt expect you to comment on this, but I do also think Klarna is very questionable actually. Because of the way they are not really assessing affordability vs how much easier they make it to buy stuff. I also think some of their store presence and marketing lean a bit too much into ādonāt worry if you canāt afford this you can buy it anywayā.
I very much trust that Monzo will do a far better job, though.
I think for a lot of people, BNPL is probably better than a credit card. Iād probably include myself in that too, certainly my younger self.
I have my iPhone on the upgrade program, which is effectively the same thing if I choose not to upgrade, I pay 20 payments and itās done. Which works out the same as buying it outright.
But this way I am fixed into paying the same amount each month. I canāt cheat myself by only paying Ā£10 this month and thinking āIāll just pay the difference next monthā
The tough thing with a credit card is being strong enough to pay it off and not just pay the minimum.
9 Likes
This is illegal.
This is morally questionable.
Big difference.
3 Likes
I wonder if itāll be at the transaction auth stage the app asks to either spread the cost, or make you pay in full then amend this in the transactions list to split this over x payments.
I think they might have tried the latter with āspread the costā if I remember right? But it comes into the problem that people use these services mainly when they donāt have the money to pay for them.
I think ābuy now pay laterā means the former. Might be wrong.
1 Like
But it still happens - youāve helped illustrate the point I was trying to make perfectly though - so thank you 
2 Likes