Thursday, April 23, 2020

Why Buy Now Pay Later Transaction Platforms Like Afterpay And Klarna Do More Harm Than Good

First, wtf are buy now, pay later transaction platforms?  They remind me of 1980's layaway programs for poor folk.  That's how my parents were able to get me a Nintendo Entertainment System for Christmas, using layaway at K-mart.  But seriously, now you can pay for shit you don't need in installments.  Wait?  Can't we do that now with credit cards?  Well, yes.  What's different about BNPL services like Afterpay and Klarna is that you can pay for a purchase in a set number of installments INTEREST FREE!

Say you can't afford something you really want.  Okay, you CAN afford it, if you paid for it a little at a time.  So does this count as being able to afford it?  Not in my book, but people have a whole host of ways of rationalizing big purchases.  Afterplay and Klarna are taking Australia and now the US, by storm.  Consumers, fed up with having to pay interest to a credit card company any time they don't pay off their entire balance, are flocking to these two point-of-sale disruptors.  It makes sense in some ways.  Like if you're young or stupid, or both!

Anything To Keep You From Having To Grow Up

First, here's a great article on the traps you should avoid if you sign up for Afterpay and use their services at eCommerce sites worldwide.  The article mentions having to pay fees if you don't have enough money in your checking account to cover the installment.  Fees may as well be an interest payment, had you used a credit card instead.  Linking your Afterpay to a credit card account defeats the entire purpose!  So, if you are using an Afterpay to credit card scheme, you're awfully foolish.

Don't compare Afterpay or Klarna to Apple Pay.  While all three eliminate the need to swipe or insert a debit or credit card, only Apple Pay use makes you a grown up.  Afterpay and Klarna are worse than starting with a prepaid credit card!  At least with a prepaid credit card, you can feel the impact of every purchase.  Afterplay and Klarna normalize debt.  They may as well be offering you a 9% alcohol by volume bottle of stout, and telling you, "shop forth my child."

These apps and services include algorithms to keep you from making one too many purchases.  How nice!  And you fell for that, didn't you?  Those algorithms are meant to protect each company from class-action lawsuits!  They're not coding in a way to stop your shopping spree because they care about you.  If they don't install these circuit breakers, their business model couldn't exist.  Use your heads young people.

Probably the worst part of using Afterpay and Klarna are that you sidestep credit altogether.  You don't build credit history.  The good type.  Your credit score stays dormant.  If you're young, like in your 20s, your timing is impeccably bad.  These are your formative years!  You're supposed to be building great credit, by using your credit cards responsibly.  Make a purchase using your credit card, stay below the 30% utilization ratio, payoff your balances as quickly as possible, and repeat.  It's that simple.  Why, young people, I ask, do you insist on making things harder than they have to be?

I love you little homies, but u gots to grow the "f" up.  There is absolutely zero need to use Afterpay and Klarna.  And don't you dare make this about poverty.  You don't need to buy expensive cosmetics, clothing, or trendy shit.  This is your shopping addiction getting the best of you.  Rule of thumb for any purchase using a credit card: if you can't pay off the balance in 1-2 payments, then you can't afford it.  Period.  End of story.  Save until you can or don't buy it at all.

*Note to Afterpay and Klarna:  Please don't sue me.  This post won't stop people from downloading your app and using your services.  I'm just keepin' it real.  Oh, as a token of my lack of appreciation, I made the links to your site dofollow.  You're welcome!  

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