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

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277 points cebert | 5 comments | 24 Jun 25 00:03 UTC | HN request time: 2.475s | source
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PostOnce ◴[24 Jun 25 00:47 UTC] No.44361768[source]▶
Theoretically, credit should be used for one thing: to make more money. (not less)

However, instead of using it to buy or construct a machine to triple what you can produce in an hour, the average person is using it to delay having to work that hour at all, in exchange for having to work an hour and six minutes sometime later.

At some point, you run out of hours available and the house of cards collapses.

i.e., credit can buy time in the nearly literal sense, you can do an hour's work in half an hour because the money facilitates it, meaning you can now make more money. If instead of investing in work you're spending on play, then you end up with a time deficit.

or, e.g. you can buy 3 franchises in 3 months instead of 3 years (i.e. income from the 1 franchise), trading credit for time to make more money, instead of burning it. It'd have been nice had they taught me this in school.

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1. jvanderbot ◴[24 Jun 25 15:18 UTC] No.44367169[source]▶
Credit cards however, can be used to get free stuff from rewards.

Credit loans or payment plans can also be used to get a higher credit score, making the first item easier.

Conversely to your example of credit making cash, Cash can make you money through investing, so Credit can also be used to keep higher amounts of cash on hand when purchases are made. , e.g., buying a car on credit and using the car money to invest. But we're saying the same thing there.

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2. kiba ◴[24 Jun 25 15:23 UTC] No.44367215[source]▶
Credit card rewards are just discounts, discounts that are charged to the merchant. It's not a free lunch by any means.
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3. BenjiWiebe ◴[24 Jun 25 17:00 UTC] No.44368309[source]▶
And as a merchant, yes it's annoying, but it's also nice when a customer pays with a credit card, because we actually get paid then.
4. jvanderbot ◴[24 Jun 25 17:24 UTC] No.44368553[source]▶
I think that's a technicality. From my perspective 100% discount is called "Free", and I get that a few times a year when flying (tickets, upgrades, etc)

I calculate 100% based on the amount I get from my preferred airline for paying cash for groceries (0) vs the amount I get by using a card they issue (a few imaginary points/$). Then I trade those points for things I couldn't have had by paying cash. As long as I don't pay interest, we're in "Free" territory.

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5. lxgr ◴[24 Jun 25 22:58 UTC] No.44371959{3}[source]▶
No, you’re still paying for all of that to some extent. Less than people carrying a balance and/or paying with cash or debit cards, sure, but more than zero. (It would be a pure redistribution from cash to card payers only if issuers made no profit or even a loss on never-balance-carrying cardholders, but if they didn’t, why would they still have them as customers?)

It’s still the rational thing to do from an individual perspective, of course, which is why these rewards are so sticky.