Banks View Heavy 'Buy Now, Pay Later' Use as Red Flag for Loan Approvals (msn.com)
- Reference: 0178438650
- News link: https://slashdot.org/story/25/07/22/1451201/banks-view-heavy-buy-now-pay-later-use-as-red-flag-for-loan-approvals
- Source link: https://www.msn.com/en-us/news/other/your-bank-might-punish-you-for-those-buy-now-pay-later-purchases/ar-AA1J3loN
[1] https://www.msn.com/en-us/news/other/your-bank-might-punish-you-for-those-buy-now-pay-later-purchases/ar-AA1J3loN
Well, duh (Score:5, Insightful)
> Banks are treating "buy now, pay later" services with suspicion and warn that heavy usage could hurt customers' chances of getting approved for mortgages or credit cards.
Third-party BNPL loans compete with bank's BNPL services - credit cards and mortgages.
Also, how are they not like a credit-card purchase, or any other short-term, unsecured loan? Are they for people that can't get a CC? If so, then it sounds like banks wouldn't give them a CC or mortgage anyway.
Re: (Score:2)
I don't think they traditionally did hard credit checks (or necessarily any, though they do seem to account for varying interest rates, so they probably do soft checks).
Because they weren't hitting credit reports it was creating shadow lending and the companies pushed it more and more.
In theory it's low(ish) interest rate if you pay in 2 months (4 payments), but then it shoots up.
A lot of people with minimal credit histories are accumulating small 4 figures of revolving debt off the record, and banks don't
Re:Social Credit (Score:4, Informative)
Captain Obvious here, noting that this isn't "social credit", this is regular "credit", also known as financial credit.
CC vs debit (Score:2)
Something that bugged me. My (major) bank issued me both credit card and debit card. They counseled me to only use the credit card because it has fraud protection. And recently now I got a $10 fraudulent charge against my card. If the bank is issuing both cards and I am using it well within my balance for recurring billing and the like, why can't they cover both? When I called the credit card people they said the bank covers it. It's like it is the same people..
No shit, Sherlock. (Score:3)
People who normalise taking loans and/or accumulate a lot of (deferred) debt are a major risk when taking on more debt. So what's new?
It doesn't pay to be poor (Score:1)
If I were in the BNPL sector, I'd be suing the shit out of FICO et al for penalizing BNPL customers. Regardless of what one might think about these services, they're perfectly legal and, if used in a responsible manner, perfectly valid; so long as the customer is paying their installments on time, there shouldn't be a problem. It could be a matter of preference to conventional loans and/or straight credit cards. If someone wants to ban BNPL for being predatory, they should do it through the legal system, ra
Pigsty Muddy (Score:3, Informative)
Wow, someone holding a lot of debt makes them a poor candidate to take on further debt?
Gotta say I'm impressed. This may be the least newsworthy story I've seen on Slashdot yet. With a few tweaks in wording, this story could've been published in the sixteenth century. And still been a major duh.
Re: (Score:3)
Only debt owed to other banks. These banks want the same customers only beholden to debt from them.
Re: (Score:2)
I think it says a great deal about bankers.
Re: (Score:1)
It'll be the priorities, rather than the debt itself. Someone inclined to spend so impulsively hasn't got their priorities in order.
Re: (Score:2)
don't think it's a matter of amount of debt.. that was always part of the calculus for loans... The offerings from other BNPL is eating into their own revenue since instead of using their credit card with an interest rate and other fees, you can use BNPL offerings that often offer zero interest on the installments so the buyer actually saves money.
This is simply a protectionist move by the banks to safeguard their own revenue streams and it's bullshit... defaulting on BNPL payments is one thing... but usin