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

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.

There are also all those reports that have come out about how nearly 40% of Americans don't have $400 for an emergency [1], with the median being just $600.

If the rule of thumb for an emergency fund is 3-6 months of expenses, and we can agree that paying interest on a credit card is a bad finical decision, then I'm not sure how the "average" person has solid fundamentals, where credit cards are being used as a strategic tool.

People also tend to spend more when using credit cards [2], which negates most benefits someone may get from using credit card for the points. So even those with solid fundamentals, who are using it as a tool, are probably still losing, just in a less obvious way.

[0] https://libertystreeteconomics.newyorkfed.org/2025/03/why-ar...

[1] https://www.empower.com/press-center/37-americans-cant-affor...

[2] https://link.springer.com/article/10.1023/A:1008196717017

Carrying a balance is not automatically the worst choice. I have a massively positive net worth (for a working stiff), so could effectively have $0 debt at any point in time, inclusive of my mortgage, but all debt is not equal, nor are all investments. Credit card debt is clearly one of the worst forms of debt with the harshest interest rates, yet even in that case selling investments and paying taxes on them and forgoing future earnings on those investments to pay off a credit card immediately vs over a few months is not necessarily the right decision.

Credit cards are about providing you float so you can smooth out cash flow. As an example, I am about to do some home renovations, I expect to spend ~$40k to do so, I also expect to earn and pay off that $40k over the following 4 months. My options are I can carry a balance on a credit card, I can keep my home in a partially renovated state for longer to pay cash, or I can take our a HELOC which has a high origination cost and acts as a secondary lein on my house. The credit card + carrying a balance for 4 months and having my home back in a finished livable state faster is clearly the best choice, but it means I'm in that 60%.

These choices aren't binary, the problem is that many people are not financially literate enough to consider their options and outcomes and choose the best choice, they either have a default choice with no consideration, or no real choice, both with negative outcomes.