Those loans can be a profit center as they make it really easy to miss a payment, and then instantly jack up the rates to ~20% APR. Think short window to make a payment and no automatic payments available. It’s probably not worth it for effectively a sub 1% discount.

>It’s probably not worth it for effectively a sub 1% discount.

The discount is small, I agree. But it's always worth it. It's riskless if you have the cash anyway.

It's worth it until you miss a payment and run in the absurdly high interest rates. Which makes it not riskless, because your risk of missing a payment is non-zero, even if you think it is zero.

And regarding having cash: if you set aside the full amount in cash at time of purchase in order to reduce the risk of not being able to pay the rates, then you did win absolutely nothing. Opportunity cost of not having that cash available for profitable investments in case of paying in cash is what could possibly be the reason for the credit variant being cheaper in the end, but that of course depends on you investing the cash and divesting just when it is necessary to pay a rate.

It's not always worth it. If you have to spend 1 hour to set it up initially, sign the paperwork and then an extra 15mins per month paying it, it might already be very much not worth it.

The fact that these constructs exist and only make money when people make mistakes should tell you that enough people make mistakes to make it profitable. This makes it not riskless at all. It makes it predatory.

These constructs also helps people buy more expensive items than what they could afford without credit. I wouldn't jump to that conclusion just because it exists. Credit companies also take small fraction of the transaction. The store is willing to pay that fees because it increases their revenue.

If they can't afford it without credit, they can't afford it with. And vice-versa. There is no credit construction that will make this different, except if it has a negative interest rate. To me this is obvious because if they can afford the credit, they can afford to save.

It’s up to you how many hoops you want to jump through for ~10$. Just be aware some companies do things like destroying mail without opening it.

Many places offer interest-free deferred payment. For example, Design Within Reach, through Synchrony Bank, lets you pay in equal installments over 24 months (or less, if you want) [1]. APR around 20% kicks in if you go past the time limit.

[1] https://www.mysynchrony.com/mysyf/paymentestimator.html?intc...

Back when I was younger I bought about $1500 in furniture from Art Van on credit, and did not pay it all off within the 18 or 24 months

Then I got smashed with a HUGE interest charge, they charge you ALL of the interest from the 18/24 months at the end of that time if you have a blance

I buy $300 couches from the clearance center now, in cash.

If you have the $300 in cash, why would you not put it on a credit card that earns you cash back or points?