this post was submitted on 02 Jun 2024
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A Boring Dystopia
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"Pay later plans"? Other than credit cards, WTF are you talking about?
Yeah, I have a credit card that pays me back 5% cash on grocery store purchases. It would be stupid NOT to use it, then I pay the card off every pay day.
Groceries + free money.
They’re talking about installment plans through your credit card. You pay a fee to split a charge into monthly installments, usually of your choosing. By paying the monthly installment and the rest of your balance from other charges, you can avoid interest kicking in, even while you owe the full amount. The fee is usually a % of the purchase, like 3% or 1% per month or something.
It can make sense on a large one-time purchase, but it’s weird to do it for frequent purchases like groceries.
I can choose with my credit card to designate a purchase over 100 bucks as a pay over time purchase. I don't use it for anything less than 4 digits, but this year we got hammered by 4 4-digit car repairs, a 4-digit tree removal, two surgeries for our dog, and a few other unexpected big expenses. I used it for the car repairs and the dog surgeries because there was a promotion where there was no fee, it just raises the minimum monthly payment, and brought the interest down. I didn't have the cash to pay that many things off at once so I'm using to to pay them down that way at a lower rate.
But you are absolutely right, using pay later plans for small frequent purchases is not great. They might not have a choice though.