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FICO to incorporate buy-now-pay-later loans into credit scores

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277 points cebert | 2 comments | 24 Jun 25 00:03 UTC | HN request time: 0.419s | source
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janalsncm ◴[24 Jun 25 01:47 UTC] No.44362116[source]▶
What is the functional difference between BNPL and credit cards that can explain why it’s become popular? A credit card is literally “buy now pay later” so is it just the ease of onboarding?
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Tadpole9181 ◴[24 Jun 25 02:09 UTC] No.44362248[source]▶
BNPL is 0% interest over N months. A credit card is 20% APY over the total balance over minimum payment. And it's offered by my CC providers.

For some larger purchases on a 12 month plan, leaving the money in savings loses me 1.5% cash back but gains me around 3% interest (after accounting for the depleting principle).

It would be stupid not to do it sometimes. I don't really get the financer's benefit. Though maybe it's because I do pay it, and if I didn't there would be 200% APY or something.

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1. dzhiurgis ◴[24 Jun 25 10:06 UTC] No.44364522[source]▶
I bought tons of solar panels with 24 month 0% interest CC for my DIY installation. Kinda makes entire system free. I wish BNPL were offering longer payment periods, few months is not worth the risk at all.
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2. wildzzz ◴[24 Jun 25 12:15 UTC] No.44365329[source]▶
Subprime borrowers use BNPL a lot and often don't pay it all back. Extending the terms would likely mean Klarna and Affirm will make back less money before the loan defaults.