Debt and Pay Later Plans: An Independence Day Rant

The YNAB Podcast

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4.7 • 1.1K Ratings

🗓️ 4 July 2022

⏱️ 15 minutes

🔗️ Recording | iTunes | RSS

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Summary

Happy Fourth of July to the American YNAB'ers out there!

Following Apple's recent announcement of their "Apple Pay Later" plan, in which customers can split the cost of purchases over multiple installments using Apple Pay, Jesse rants about the state of financing among successful companies. As he has noted before, nearly all successful companies eventually become finance companies, and Apple is no exception.

Buy now, pay later (BNPL) plans may be good for Apple's bottom line, but they are bad news for consumers. Research has discovered that people tend to buy 40% more with BNPL plans than they would have with cash. Then of course there is the interest and penalties that come with missed payments. Jesse has a bone to pick with this...

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Transcript

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0:00.0	Hello, wine embers. My name is Jesse Meakin with another episode of the wine amp podcast
0:08.8	where we teach you four rules to help you stop if you paycheck to paycheck, get out of
0:12.0	debt and save more money and don't go in to debt. Just don't do it. Don't do it if it
0:21.5	even looks like it's not debt. Y'all know, I've said, I know I've said on the podcast.
0:26.8	I know I've said in places every successful company eventually becomes a financing company.
0:36.6	Paypal starts doing their loans. eBay starts doing their loans. Car dealerships. They don't even
0:43.5	make money selling cars. We'll accept for 2020 all that, but they do it from the the financing
0:49.4	GE capital, which took, you know, has been taking a bath recently, but for a long time,
0:52.8	they were just printing money. So what other successful company has decided to become a
0:59.6	financing company? You could see the writing on the wall a little bit with the whole, you know,
1:04.1	just pay for a, you know, pay monthly and we'll just send you the new iPhone whenever it comes.
1:10.4	But now it's in full force. Apple, love them. Love the iPhone. Sitting here recording this
1:18.4	on garage band on a MacBook Pro with the Mac. I'm not anyway. So Apple's jumping into the
1:26.6	buy now pay later space. I had Sophia on the podcast a while back. We talked about the intricacies,
1:32.5	the traps of buy now pay later. It's horrible. Interest free. It's not free. It's not free at all.
1:42.7	You're just hamstringing the future version of you. And I know there are people who say, hey,
1:47.6	listen, it's the only way I could buy it. It's the only way I could, I could put food on the table.
1:51.5	It's the only way I could get this. I get that there are people that are in a pinch,
1:55.6	but I also get that straight right on the the page of like, hey, you know, small business owners
2:04.1	sign up for after pay or car or whatever, they're all the same. Right there, it brags about how
2:10.3	shoppers tend to purchase up to 40% more if there is a buy now pay later option. Why? Because
2:20.4	they're deferring. So you know, they're not paying interest. Maybe, but man, read the fine print.
	...

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