The phone I'm typing on now was financed through symphony credit. Zero interest, and 36 monthly installments. I'm sure there are penalties if I don't pay every month, but it's on auto pay.
That kind of loan is nothing new. My parents were buying furniture on zero-interest installment plans decades ago. They offer zero-interest financing as an incentive to buy.
The article is about installment plans replacing high interest payday loans, which is a whole other game.
I’m guessing this was probably an arrangement between Peloton and Affirm to where the former paid some fee to the latter, and all of that is absorbed as marketing overhead just to get more people buying bikes.
See the pitch for the already mentioned Affirm: https://www.affirm.com/
Over here in the UK, the main culprit is a company called Bright House. They sell new household electronics and other goods on credit at around 70% to 100% APR.
They exploit the rush you get when you buy something shiny and new. For a lot of their customers, it is the only way to kit out the house with new appliances and furniture. The ability to do that gives their customers a false sense of achievement and secuirity which is exactly what these lenders exploit.
People are buying Peloton bikes, exotic vacations, and luxury purses, and hoping to pay that debt off in installment plans.
I worry about when enough people hit the tipping point where their monthly minimums on deeply depreciated goods are too much to be able to make.