There is nothing inherently wrong with that but it's a lot more risky then saving up.

Say after 10 months an unavoidable bill of $4k shows up and I got to pay it. If I'm saving up I can redirect that money. It sucks that I don't get the camera when I planned to but otherwise I'm fine.

Under a BNPL plan I have no extra money to allocate and might have to dip into Credit (potentially with high interest).

In short: Savings are fungible, payments are not.

Studies show that huge percentage of the population doesn't have any savings. For them it's particularly dangerous to have more recurring bills.

Your method is just as risky - say after you've just spent 5K on your camera an unavoidable bill of $4K shows up? Now you have no extra money and have to dip into Credit (potentially with high interest). Your best strategy would have been to have $5K on hand and still use financing if the terms are favorable - it keeps your funds at steady level, allows for future planning and gives you opportunities to invest or otherwise grow your capital. And yes, people without savings pay for that, it sucks to be such people but they are paying regardless if you take advantage of the financing scheme.

Then you sell the camera and pay off the bill. Sheesh - it's a camera, not a life support machine...

I think you might be overestimating the liquidity of the used camera market a little bit.

Does it matter? Even if he only gets half the price back, that leaves 1500 left of the debt he has to pay out of pocket. If he's paying monthly for the camera, he suddenly has a $4000 bill on top of whatever of the $5000 debt remains unpaid. I think I'd rather be in the former situation.

Even if not having any debt is extremely important to you then you are still out of 2500 on your camera transaction, which is pure loss here. However some people consider not just an amount of debt but its other qualities too and for them having debt of $5000 with 0% APR might be preferable to having $1500 debt with, say, 20%+ APR. At the end you need to count a monetary balance and compare a ($2500) loss on camera together with the interest paid on your $1500 loan against paying $5000 for the camera.

If math is hard consider your end state:

1. Without the camera, without $5000 + interest on the $1500 you borrowed.

2. With a $5000 camera, without $5000 you paid for the camera.

The state of the $4000 bill is the same in both cases, which state you prefer?

> If math is hard

Get fucked, mate.

> There is nothing inherently wrong with that but it's a lot more risky then saving up.

Cash is king. Assuming 0% interest, it's financially better and less risky to do BNPL. This is separate from all the other financial decisions like savings, etc...

It's similar with CCs. I love my CCs and get a ton of value and free stuff by using them. I also have never carried a CC balance in 20+ years. Someone who is financially disciplined is leaving money on the table when not using CCs.

>Someone who is financially disciplined is leaving money on the table when not using CCs.

The trick is knowing whether or not you're financially disciplined. And usually one finds out the hard way. It often involves a credit card or credit facility of some nature.

This here. Not everyone can do that. I personally can. I try to teach my friends and family to save a bit and use credit cards as a tool to get a small bit of free stuff. However, those things are deadly if you have no skill in saving in the first place. They will wipe you out with interest payments and then some. That method only works if you have the ability to save first and put off impulse buys. Even having something simple like a checking account can be bad if you have poor ability to balance your budget.

My wife for example does not have this ability, however I can manage it by basically controlling the amounts we have and putting restrictions on how money is spent that teach the lessons of saving that her parents for some unknown reason skipped teaching her. Lessons like 'you have X amount of cash lets save up for that thing you want' 'lets review our purchases and see if they make sense on the amount of income we have' 'yes, your friend has a need of 100 bucks and we can cover it but will giving them 100 just make them ask next time for 1000 and will it actually fix their problem or delay it?'

I think the ability to manage money well and not get screwed over by credit facilities is highly correlated with ones level of trait conscientiousness. It's less about skills per se than it is about that particular trait. I would wager those high in trait conscientiousness naturally tend towards frugality and budgeting and those low in trait conscientiousness tend towards impulse buys and poor financial planning.

My wife is 99th percentile for trait conscientiousness and I'm 1st percentile. I'm amazed at the amount of money she's able to save and her level of discipline and she's generally gobsmacked at the amount of money I waste and the random shit I buy.

Having the information about what one should or shouldn't do is only part of the equation. 8t also needs to be something you can apply, and sadly some of us just can't.

Why punish normies who have the same discipline with more expensive stuff?

If you take 12 payments you, by definition, are in debt! It seems you are conflating debt with net worth - a person can have positive net worth and still have debt(s). Even if it is 0% interest you owe money to someone. Every debt is a risk. It may be smaller or larger, but it's a risk. It also normalises the behaviour of going into debt for buying depreciating objects which is bad by itself.

It’s financially reckless. What if you lose your job?

You then pay off your outstanding debts if you think there is risk you will be paying out more in the near term... That's why you only carry debt when you could otherwise afford something. Literally thats the point. Realistically though its even better if you lose your job because you have the cash in the bank you would otherwise have sunk into an asset.

You can’t pay it off if you weren’t able to afford it up front. You’ve changed the scenario from “I can’t afford the full cost but can afford monthly payments” to “I can afford this and am using monthly payments as an interest free loan”.

Go read what I said, the premise was you can afford the item outright but it still doesn't make sense to if you have interest free credit available.

Ideally you have an emergency fund so it doesn't matter. But compared to paying the cost up front I think you'd be better of using BNPL actually. You'll have more cash on hand to pay for necessities like food/rent, in exchange for a ding to your credit score if you don't have enough money left over to pay the monthly payments on the camera you use for your budding photography business

I think the argument is that its easy to get out of control and leave yourself exposed.

If you have discipline then I don't see any problems. I might behov the industry to be forced to do more stringent credit checks before allowing it either by law or regulation.

I have no sympathy for adults (important distinction!) who have no discipline with their finances. They aren't children who literally don't know better.

Those who do have financial discipline should not be inhibited for the sake of those who do not.

Besides, /most/ cases of financial ruin aren't literal death. They are generally just very expensive and horrible-to-go-through life lessons.

Sure but regulations are the to avoid them creating systemic risk by lending to dead beats.

Always spend other people’s money, especially at 0%. The trap is it creates a mental pattern to condition you to accept paying interest on other purchases.

Well said, but I feel like practicing your first sentence makes it relatively easy to be good at avoiding the mental trap you describe.

Paying in installments requires you to have a secure stable income.

You may not have one tomorrow.

You may lose your job.

You may go through a divorce.

Maybe you have to move for months because your house has been flooded.

You don't know what your tomorrow's financials look like.

The only time that it may makes sense to pay installments if if the interests are really 0% and you have lots saved anyway. At that point..why not improve one's credit score anyway.

> The only time that it may makes sense to pay installments if if the interests are really 0% and you have lots saved anyway. At that point..why not improve one's credit score anyway.

BNPL providers typically provide 0% interest rates for longer that credit cards, which have 0% interest for anywhere from 3wks to 7wks (depending on when your statement closes relative to when the transaction settles).

if you can get a loan at 0% interest it's definitely in your best interest to pay that loan back as slowly as possible. The longer you wait the less you effectively owe as inflation does its thing. I'm 46 and still paying on my student loan, the interest rate is so low that (even in normal times) inflation outpaces it. I'm making money by paying it back over decades.