←back to thread

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

(www.axios.com)
277 points cebert | 1 comments | 24 Jun 25 00:03 UTC | HN request time: 1.061s | source
Show context
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?
replies(4): >>44362180 #>>44362248 #>>44362419 #>>44367148 #
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.

replies(4): >>44364338 #>>44364522 #>>44365631 #>>44368056 #
1. crab_galaxy ◴[24 Jun 25 12:49 UTC] No.44365631[source]▶
Yeah, I’m not sure if BNPL loans have changed in the last decade at all but the financiers make money on the people who don’t pay the balance by the end of the term. I’ve financed a couple expensive electronics when it made more sense in my younger days and the terms were such that if you don’t pay it off by the end of the term, you owed ~24% of the total bill in interest.