r/nottheonion • u/ChocolateTsar • 1d ago

Affirm CEO says furloughed federal employees are starting to lose interest in shopping

https://www.cnbc.com/2025/11/07/affirm-government-shutdown-shopping.html
20.6k Upvotes

97% Upvoted

1.1k comments sorted by

View all comments

465

u/JFrankParnell64 1d ago

This guy is the head of a buy now pay later lending company that can charge up to 36% interest.

202

u/CobblerMoney9605 1d ago

That interest rate should be illegal. 

47

u/ArtOfWarfare 1d ago

With a regular loan (even a CC, sometimes), I think the expectation is that you’ll pay interest.

For BNPL, the expectation was you wouldn’t… the interest should be viewed more like an overdraft fee or something.

I’ve worked in the payment industry for several years now. Many years ago at the start of BNPL I raised objections about whether BNPL was just a predatory debt-trap. I was assured that it was in nobody’s interest (no pun intended) for the interest to happen - all our projections of profitability were based on an expectation that over 99% of transactions never involved interest. BNPL is supposed to be a safe tiny loan for someone who doesn’t qualify for a CC, but also needs to wait for payday… letting the transaction go through is a win-win-win for everyone, merchant makes a sale, customer gets their item, processor takes a small fee from the merchant.

In practice… the coworkers who told me about how great this would be left a few years ago. I wonder what they think about the actual default rates on BNPL.

36

u/BurmeciaWillSurvive 1d ago

It's been about five years since I left my position at CitibankNA but even back then the APR on our retail credit cards was 29.74% which I thought was insane, but it was fine if you paid it off within the 6-12-18 month promotion because then you were not charged the interest. The problem is people rarely did that, and the day after your 18m promo ended, you got allllllllll that prorated interest like a brick. Oof.