There’s a bunch of bs predatory services that will let you finance literally every purchase. There’s a picture of someone “finally” paying off their $1.50 Costco hotdog after like 4 payments.
Those are usually interest free services. The company selling you the product pays the fee. Which means the fee is baked into every product.
But also it’s a way to increase sales, otherwise they wouldn’t offer it. Not sure why the fuck they’re offering it on fast food in the US though, it’s meant for stuff that cost a bit more than you could afford right away in one payment but won’t make you destitute to pay in 3. E.g when I bought a bicycle, I bought a slightly nicer one than I had spare cash for, but paid the exact price over 3 months, not a cent extra. Not with Klarna, but similar service in my country.
Ah yeah I didn’t realize that in the US interest could be charged after the fact like that.
Where I live, the interest for these deals is 0%. Some have a small service fee. But they really make their money from the merchant and generally whoever provides the 3 month payment option also provides the regular installment plan options for the same merchant and those have pretty high interest.
Basically those deals are there not to make money on their own, but to get you to buy more things (that make the seller money)
Until you forget a single payment… then you’ll get retroactive interest (back to the day of your purchase) at a very high percent, as well as other fees.
I’m sure you could, but with financial literacy where it is, I doubt even automating it at a mid sized scale would be enough for them to cut back on lending.
There’s a bunch of bs predatory services that will let you finance literally every purchase. There’s a picture of someone “finally” paying off their $1.50 Costco hotdog after like 4 payments.
Okay, well the interest goes to the poor, entreprenourial small business owner who made your burrito, right?
Right?
Those are usually interest free services. The company selling you the product pays the fee. Which means the fee is baked into every product.
But also it’s a way to increase sales, otherwise they wouldn’t offer it. Not sure why the fuck they’re offering it on fast food in the US though, it’s meant for stuff that cost a bit more than you could afford right away in one payment but won’t make you destitute to pay in 3. E.g when I bought a bicycle, I bought a slightly nicer one than I had spare cash for, but paid the exact price over 3 months, not a cent extra. Not with Klarna, but similar service in my country.
Oh, there IS interest
Ah yeah I didn’t realize that in the US interest could be charged after the fact like that.
Where I live, the interest for these deals is 0%. Some have a small service fee. But they really make their money from the merchant and generally whoever provides the 3 month payment option also provides the regular installment plan options for the same merchant and those have pretty high interest.
Basically those deals are there not to make money on their own, but to get you to buy more things (that make the seller money)
I didn’t mean an interest as in gain, but rather they have an interest to fuck you over
Until you forget a single payment… then you’ll get retroactive interest (back to the day of your purchase) at a very high percent, as well as other fees.
Ah, maybe in the US. This wouldn’t fly here.
I would like to finance 1 burrito, please.
If they have no minimum then you can totally make it cost them money
I’m sure you could, but with financial literacy where it is, I doubt even automating it at a mid sized scale would be enough for them to cut back on lending.