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https://x.com/adamscochran/status/1995501382171025884
My money is on the Chinese shutting down their gamer gatcha market to Japan dominoing to the AI market imploding via Nvidia going bankrupt or some shit
that's a funny way to describe using a credit card
There are a lot of "buy now, pay later" like Klarna/layaway type options people use especially for Christmas, it's not necessarily credit cards, it would be interesting to see a more specific stat
That 67% not paying it back with the month is still wild, even if it was a lot of credit cards they're still going into (I imagine deeper) debt.
Not necessarily. Klarna and services like it offer zero-rate loans for like 3 or 6 months, because they don't operate like a bank making money off the interest of the loans they give, they're a fintech who make their money raising capital, or by packaging your 12-installment doordash with millions of other people's small debt and then selling it in debt markets. Essentially the thing that led to the 2008 financial crash, but now this time instead of mortgages, it's financed burritos and Christmas presents. It does seem that thesemicroloans have a lot of delinquency, so... Yea.
Dog the bounty hunter busting down your door to repossess the burrito you ate 6 months ago.
I'm here to secure 700 Calories, one way or another
shitting and pissing in a bag so i can give it back to them
they WHAT It's 2008 2 all over again
Could have sworn they are making money from the retailer side if it. Because I pay them every time a customer uses their service.
How are they making money from bundling up bad 0% interest debt and selling it? They would be losing money right off the bat.
You're right, I forgot to mention commissions from the merchant side as part of their revenue stream. Klarna reports about 2.76% average commission, so the rest is only consumer loan repayments.
As to how do they make money? The short answer is they don't, because they don't have to. Revenue or profit don't matter to investors and the people trading the stock; they are interested in user growth, with the hope of one day jacking up the interests and commissions once they have become indispensable and have enryone hooked on cheap, easy credit.
The slightly longer answer: I've been looking at Klarna's financial reports for a while, and they are bleeding money.
The problems will come if/when anything disrupts the hype cycle: either making delinquency rates much higher because of a financial crash, bond sales/ratings lower, stock prices drop, or a combination of the three makes everyone realize an average loan of 28 bucks for 6 months is a terrible business model, and the whole house of cards comes crashing down, bringing who knows what with it. I don't think it'll go down like in 2008, because some Obama-era regulations to prevent that are still in place, but it'll be a big shock to consumer debt markets for sure, and will more than likely mean that you'll only be able to buy a car for dodge charger sold outside of an army base kind of rates, or a house with a generation-spanning repayment plan.
Disclaimer: I only know the barest bones of finance and bookkeeping, so I might be out of my depth here. But if it looks bad to a dumbass like me, imagine how bad it can actually be.
Exactly my point. The statistic is essentially nonsense when most digital payments in the u.s. involve a credit card.
It's really not
I mean, not really if you treat it like a debit card and never spend more than you actually have in the bank. Then you benefit from whatever points or rewards your credit card offers
I’ve never heard that saying before, I like it!
Yeah it’s certainly a slippery slope that has some serious consequences if you don’t use discipline and stay within your budget
I don't know that it's a saying, except in the sense that it's a thing that I said just now.
For me, it's a cashflow thing. If I use credit that's one month I do not have to spend my own money on something - it also allows for larger purchases in one place, whereas I might have to move a bunch of money around and wait days if I paid cash.
Credit card companies make their money on merchant fees, the people who get trapped in cycles of debt are just the gravy on top for the fuckers.
So what happens if someone who isn't lucky enough to have a good education in finance experiences sudden financial hardship and then relies on paying more on credit than they have in the bank? (An extremely common occurrence) Would you say the debt makes the situation better or worse?
And then, does that make you rethink whether its "not really" bad?
Very good point. I was responding to the “everyday purchases” not being all that bad to use a credit card for if you already have the money for it.
Sudden financial hardship is a much different situation and I agree, the debt would make it worse
Right, but I think the implication in "people" after "95% of sales" there is pretty clearly "our whole society", which presents the above problems. With the context, it made your comment read as "this doesn't need to change, and if it goes bad, it's your fault". But I'm glad you understand. We just very commonly have people from the Lemmiverse here with comments to the effect of "the status quo is good, actually".
Credit is evil, I agree. I also feel terrible knowing that whatever treatlerite points I get are paid for by someone getting fucked over. Either through transaction fees or insane interest rates.
You refinance or ask your credit card companies for grace.
Or go bankrupt.
theres a lot of us that pay off balances immediately and use the credit card for convenience, security and perks.
credit cards have way better user protections for fraud than debit cards. if there's a bogus charge, i can dispute it without that money going missing from my cash account. the onus is on the card company to figure it out, because i don't have to pay for it. so they invariably reverse the charges while conducting their investigation. debit fraud can be brutal, because the longer the bank dawdles, the more fees and payment rejections you can incur while your balance is artificially low.
i only need to carry a little bit of cash, and my particular card gets cash back between 2-4% on all kinds of shit like groceries, fuel, retail household items etc.
the only time i pay with some other method is when there is a card convenience fee / cash discount... which is becoming more frequent and often exists with independent contractors and muncipalities.
using a CC for everyday purchases is not any more precarious than using other forms of payment unless you can't trust yourself to stay in a budget... in which case, you shouldn't use checks or a debit card because you can totally go crazy with those too and get buried in fees, not to mention the punitive banking moves like reporting to chexsystems, after which you're gonna be punitively de-banked and forced into the realm of short term loans and those strip mall check cashing services with exorbitant fees.
Noted, adding credit cards to my mental list of evil capitalist bullshit that ostensibly leftist hexbear users will vehemently defend, right next to car ownership
"socialism is when u use cash and checks. the more cash u use, the more socialism you are doing." - carl marcks
I don't use credit (or debit, for that matter) for any small business / mom & pop / farmers market stuff since that processing fee is killer. I do use it for everything else from gas to groceries and such.
I had my debit card skimmed at the gas station, $500 drained from my bank account from a gas station two states away. I didn't see that money for a month, and I really needed it at the time lol. Now whenever I get scammed I just call my CC provider and they send me the money back while they work with their fraud department.
as he explains in the tweet, it's not the 95% that's really concerning, because of credit cards. it's the 67% that openly admit they'll need more than a month to repay this debt. apparently this group used to be 20%.
When I first saw that stat I was shocked, thinking it was referring to buy now pay later. Just sat there for a solid minute thinking about how wild that was. "I bought stuff, but I didn't finance it!" oh- I did. Credit card.