bro. Fucking – Think about it. Klarna pay in 3 installments divide the cost by 3 and take payments monthly. Month A, you pay one third. Month B you pay one third of months A and B. By month C onwards you’re consistently paying three thirds or 100% of the rent. You’d only defer yourself the value of one month’s rent over the span of two months. Pointless.
That’s how fucked our economy is. There is a significant number of people so close to the edge that buying an extra 10 days before eviction is the final gasp before becoming homeless.
Yes. Previously the alternative was payday loans, which charged exorbitant interest rates.
People have tried to ban these sorts of predatory loan businesses before but it usually forces people into the hands of organized crime loan sharks who charge even more exorbitant interest and exact brutal punishments on people who don’t pay up.
They should be illegal. The literal only difference between these ‘services’ and the mob is they typically don’t break your knees.
But that’s not the only despicable thing about the mafia’s racket.
These people squeeze the last blood from people who often become homeless anyhow; whereas if landlords had souls, many people could at least keep their housing and not be so vulnerable to predators.
which charged exorbitant interest rates.
Same goes for Klarna if you miss payments.
That’s how you keep score in bowling.
And isn’t there interest when doing this as well?
Oh my yes!
No, but there are fees for late payments and other special situations.
Their main income is from the transaction fees that they charge the merchants.
The idea is that people who don’t have money can spend money and create a transaction fee on a sale that wouldn’t otherwise have happened if they didn’t lend the money. That way it’s the same as a credit card that you only pay monthly.
The difference is that the payments can be split, so that the customers can … uh … utilize their entire credit maximum every month…
Needless to say, this kind of credit maximum optimization can end really badly for people who have unstable incomes. The same kind of people who might be tempted to use it.
Yeah, exactly. It’s very predatory.
I don’t think I’m their intended customer demographic. 😅 I use it to keep a tight check on all my purchases. Recently started doing the monthly invoice thing as well, so neat and tidy. One payment every month, then rearrange money in our bank accounts as needed based on shared economy with the wife. Bish bash bosh.
I lost interest after like the second sentence. Sounded too much like a middle school math problem.
Yikes, alright, good luck
Fwiw there’s no interest on Klarna where I live 🤷
And where is that? 🤔
Where I live there’s a bit of interest when you postpone your payments further than 30 days. Other than that, no interest. Just like a regular credit card.
Maybe it’s something past 30 days. I haven’t used anything past that. Suppose I talked out of my ass a bit.
Unless they are using the “Klarna Glitch” (see Identity theft)
https://frankonfraud.com/the-klarna-glitch-that-isnt-inside-the-new-viral-trend/
Wait til they find out about the “gun glitch” (armed robbery)
Dystopian fucking timeline. Around every corner there seemingly waits billionaires waiting to fuck ppl over
Yet more proof that “richest country in the world” doesn’t mean what Americans think it means.
fattiest?
“Can’t pay rent? Don’t worry we have an even more humiliating solution for you!”
Can’t pay your monthly rent? We can pay it for you with a monthly payment schedule.
Rent money to rent apartment
Great idea
Richest nation in the world.
Does include national debt?
Klarna 'bout to find out their business model doesn’t work as well in the US compared to the Nordic countries and EU, as
- People are already up to their neck in debt, putting Klarna to the back of the queue in case there’s a default
- Personal bankruptcy is a thing
Especially the Northern Europe personal bankruptcy is really not a thing, fuck up your finances and you’re never going to see a penny you make (above what you strictly need to live) until everything has been paid back. Debt that is actively being collected also never expires.
There’s a good reason Klarna’s been able to thrive in this environment – getting debt from banks is quite difficult and you have added security from the draconian collections process.
In the US a company ignores credit scores at their own peril. The bankruptcy process is one of the few things that works better in the US than in e.g. my home country Finland.
People are already up to their neck in debt, putting Klarna to the back of the queue in case there’s a default
People in debt (before there is professional help) end up paying the important things first (such as rent) and then choose to pay off the debt that is most within their reach. Klarna is much more likely to be a low amount compared to their creditors.
It might be true their loans are more likely to be payed back while also they might have less to loose in case of a personal bankruptcy.
But that aside, i have no clue on whether Klarna is making a smart move. But i assume they are because companies that are both evil and stupid don’t tend to come far.
Eh, I dunno about that last point. “Evil” is a pretty OP strategy if you have the stomach for it, usually leaves lots of room to survive doing dumb shit. And hot DAMN greed is good at convincing people to do dumb shit!
On the one hand, don’t underestimate their cunning, I do agree with that. But on the other, I’ve never liked the “4D chess” assumptions some folks are so willing to make (not meaning you here), it’s unwise to overestimate it, too.
“Evil” is a pretty OP strategy if you have the stomach for it
I think they do have the stomach for it. And also smart enough to get away with conning people, to know how to not get in trouble with lawmakers, do that fine print just right etc. They act as if they are helping people by offering easy credit while they know they’re not earning money from people who can easily pay them back. They profit off the least capable to keep their finances in order, living of the weak and vulnerable like parasites do.
Hard agree.
Is there a good article about this?
I’ll try to find some and link, but I’m not sure if there are good ones.
Edit: couldn’t find one with quick googling. Guess I’ll have to write one when I have time.
I’m no Maoist but those ‘land reforms’ are starting to sound pretty good right now.
Hell yeah killing millions of innocent people and starving 50 million more because you dont like a Swedish finance app
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The first four words of my comment were “I’m no Maoist” quite clearly signaling that I don’t affiliate myself with Maoism.
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The rest of my comment was in reference to Mao’s Land Reform Movement (i.e. those oh-so famous landlord killing memes). You’re thinking about Mao’s Cultural Revolution and The Great Leap Foward which were separate incidents that did, indeed, kill and starve many innocent people. Mao was tyrant and despot but no one, absolutely no one, missed the landlords. Well, maybe, expect the ones that fled to Daddy Chiang.
This goes beyond not liking a Swedish finance app. This is about the dystopian absurdity of financing your rent payment. It sounds like a plot point from a William Gibson novel. You’re borrowing money, that you’ll have to pay back with interest, to have a roof over your head; a roof that is not even yours. Klarna would very happy to lend you that money so they can profit from debt and the landlord(s) will be happy because they’re still making money without providing value. You don’t have be Marxist to see why this is a problem.
i dont affiliate myself with Mao but here is why murdering land lords was actually a good thing.
Bro read the history trying to defend that is gross.
It seems you hate the american lack of welfare not Klarna. Unless your issue is that poor people have access to credit? I think thats their right and it would be fucked to deny them that. If we compare the situation with klarna vs without they miss their rent payment.
Even in countries where you lose your job and the government gives you money and pays your rent these people would still spend irresponsibly and get into debt.
Found the landlord apologist lol
Yeah people shouldnt be murdered for owning property crazy take I know.
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i just want to shoot sparrows okay
Americans aren’t doing exactly that right now to Palestinians.
Did you mean to say Isrealis?
Life expectancy doubled during Maoism. People starved because millions routinely starved in China as a preindustrial country. Compare starvation in China with that of India during Maoism, and you’ll see the tens if not hundreds of millions of lives communism saved against the alternative.
So what? Your core moral values are fucked if you think thats the case. You must look at what’s happening in American as completely ok because from Trumps point of view the end justifies the means.
If we apply that kind of logic it allows people in power to do whatever crazy action they want in as long as they are in pursuit of a “good” goal.
How’s Maoism comparable to Trumpism? Maoism reinforced women’s rights compared to what came before, reinforced worker’s rights, kickstarted industrialization, defeated fascism in China (both the Kuomintang and Imperial Japan), freed China from colonialism, and doubled life expectancy. It wasn’t perfect for sure, but any political alternatives at the time were measurably worse by any metric.
Financing is bad at the best of times.
No, it’s not. Financing is a great tool, and used wisely and with knowledge of interest rates and total cost, can elevate you quite a bit in life.
This however is predatory lending, and it should not be used ever.
Predatory lending in the vast majority of developed economies other than the US:
Adjustable rate home mortgages being issued to financially illeterate people without extremely clear and emphasized risks and disclosures.
Same thing with HELOCs.
Vehicles loans with rates over 15%.
… subprime lending basically just is predatory lending that we don’t legally call predatory lending.
Oh and then of course there is the entire system of Private Credit Shadow Banks who issue trillions in loans to all kinds of business entities, who basically aren’t required to do anywhere near the level of accounting rigor or transparency that actual banks do.
We just basically don’t regulate them.
This is a financially naive and reductionist take, approaching financial illiteracy. Applied correctly, financing allows you to preserve liquidity while still leaving funds in accounts with higher returns. Financing also provides a hedge against inflation, e.g. real estate.
Financing also literally causes or just is monetary inflation, in a debt-based fiat currency system.
Those with access to credit leverage it and prosper roughly proportional to their level of credit access, those without access to it pay the inflation tax and suffer.
This is why capitalism has bubble/pop cycles, inherently, systemically, unavoidably.
When your home is functionally your own personal bank, you want home values to keep going up… which necessarily causes less people to be able to afford homes, and in a society based on access to credit being necessary to ‘buy’ a home, this creates and exacerbates a class divide.
(You really haven’t ‘bought’ your home untill you’ve fully paid off the mortgage, untill then you’re more or less doing a complex rent-to-own from the bank.)
Its also why you get ‘too big to fail’ banks and other entities… they have a bunch of bad debt, and if they are forced to actually account for it, well that would mean so many write offs that it would massively decrease the money supply, which is a recession/depression.
The same dynamic is at play with college costs.
More financialized, more loans? Prices go up. Less people can afford college, or in our lovely system where student loans are not dischargeable in bankruptcy, more people become literal debt slaves.
Same dynamic is also at play with vehicles, cars.
… real estate is only a hedge against inflation in a society that is stratifying, becoming more inequitable.
If that’s your inflation hedge strategy, you must understand that mass broad usage of this strategy actively causes the impoverishment of those who can’t afford super-inflating home prices.
Super-inflating home values is the Boomers climbing a ladder, and then once they’re on top of it, constantly pulling that ladder higher, further and further away from the ground, from all their kids.
EDIT:
Median age of a new home buyer, as of latest data, is now 40 years old.
It was ~28 through most of the 80s.
If that’s your inflation hedge strategy, you must understand that mass broad usage of this strategy actively causes the impoverishment of those who can’t afford super-inflating home prices.
And yet an individual has to “play the game” to avoid falling into poverty. I’m not sure what else could be done here. Anyway, privilege begets privilege beyond all else, and at the end it’s mostly luck of the draw.
I’m not sure what else could be done here.
Reform or overthrow the system instead of participating in it to the detriment of others.
Start or join a housing co-op.
Do something to alleviate the harm, or provide an alternative system.
If you have enough assets/credit to consider getting a home mortgage, you have enough assets/credit to make a meaningful difference.
No more excuses.
In a broken system, doing good, being moral, has costs, is difficult.
Instead of leveraging your privelege to increase or sustain your privilege, leverage it toward effective change.
“I don’t know what else you’re supposed to do” is why the machine keeps grinding everyone to death, is why more and more people become homeless, is ultimately why the planet’s climate is now fucked beyond repair and we can now only attempt to cope with the now unstoppable changes that are coming.
You understand what you are doing by participating in the system, therfore, you either condone it, or you’re a hypocrite.
I wish I had the capital and time to try to fix the system. I’m not rich, I have to work to pay the bills and mortgage. I do understand my relative privilege and so try to do good where I can. I’m involved in 3 charitable organizations locally. We help feed and house lots of people. We bring clean drinking water to desperate populations elsewhere. I raise more money doing this than I could by taking my salary and directly spending it to fix an entire system. So, am I still a hypocrite? Boolean, absolutist thinking actually hinders progress.
I completely agree with everything you said, both in this response and your response to Scrubbles. I also appreciate your long-form responses in both.
This is, however, the system in which we live. There is no ethical consumption under capitalism. Choosing to pay cash for big ticket items, real estate, and durable goods when other accounts/portfolios earn more interest than the financing… that’s just throwing money away. If your laddered certificates accounts earn >3.5% and you can get 0% or 1% automobile financing (and you need a vehicle where you live), I don’t think anyone would choose to burn that much liquidity.
You really haven’t ‘bought’ your home untill you’ve fully paid off the mortgage, untill then you’re more or less doing a complex rent-to-own from the bank.
Agreed. My options where I live are primarily rent or mortgage; there are intentional communities with equitable arrangements, but the waitlist is 5 to 10 years. And with rents here going up at about 8% to 12% per year, I chose the 3.7% mortgage. FWIW, most home sales in my area are industrial investors or second homes, which absolutely underscore your points regarding livability, financial violence, and <waving around> all this shit in which we live.
real estate is only a hedge against inflation in a society that is stratifying, becoming more inequitable
Again, fully agreed. Inflation is here. None of us are going to wish away inflation or predatory lending, because primate brain and “they” have our number. If one has interest rate arbitrage available, using it prudently leaves more disposable income, and therefore more time to strive for more equitable systems. For example, I am the treasurer for my regional timebank, and among my offered services are financial literacy, budgeting, and household bookkeeping. This won’t surprise you at all: it’s my most used offer (>100 hours used) and the number of people lacking these skills… it’s almost like this system is designed for a certain scope and scale of financial ignorance.
For example, I am the treasurer for my regional timebank, and among my offered services are financial literacy, budgeting, and household bookkeeping. This won’t surprise you at all: it’s my most used offer (>100 hours used) and the number of people lacking these skills… it’s almost like this system is designed for a certain scope and scale of financial ignorance.
Well hey, you’re actually doing some effective harm mitigation and working to provide a framework of alternatives!
That is actually commendable, I tip my proverbial hat to that.
I used to work at a nonprofit serving the homeless and at risk of becoming homeless… after enough years inside a few Fortune 500 companies showed me the true extent of the horror.
Sadly I got badly maimed and am almost a year into full time at home physical therapy… progress is real, but slow.
Had to move to the middle of nowhere to find somewhere I could afford to rent off of just SSDI.
But anyway, yes, it is very much obviously intentional that we have a lack of financial literacy and at this point just general literacy:
The Republicans have been doing everything they can for my entire lifetime thus far to destroy public education, and it is working.
If you’re the average earner, you absolutely cannot get loans at lower rates than the interest you may get on your meager savings.
I deeply empathize and sympathize with the challenge. I also failed to choose “congenitally rich” at birth, and I hope to remedy this error on my next iteration.
But seriously, I grew up very poor and left my abusive home at 16. I was homeless twice. Once in my late teens and again in my mid-20s. Not “crashing on my friends’ couches” homeless, but rather “living in the woods and dumpster diving for food” homeless.
I bring this up as empathy by way of anecdote, and also as acknowledgement of my immense luck and privilege. I know that reaching a place of relative comfort is fucking hard in our modern environment. What’s an even bigger pisser is that cost of living is stupid, the systems required for modern life are expensive, and the attacks on our attention, focus, health, and well-being are legion.
So it comes down to: is your position yet painful enough for you to want to do something about it?
I literally took out a mortgage to buy my house. That’s financing.
If I lose my job and I’m not able to find another one then the bank will repossess my house, but that doesn’t make my purchase of my house a financially irresponsible decision. The repayments on my mortgage are considerably less than the rent that I used to pay, so I am much better off now than I was previously. Anyway I would have lost my rental had I stopped paying as well, so nothing’s really changed.
Gatekeeping basic necessities behind paywalls is economic violence.
coming soon: Americans are fucking drowning in debt
neofeudalism here we come!
Could I get a loan to help me pay a klarna instalment?
How deeply can we dig this hole?
you are not gonna believe what the banks did in 2008
I knew a guy in college that kept getting new credit cards to pay off other credit cards he had maxed out. I wonder what his credit looks like now.
that’s me, been trapped in that cycle since I had to pay several months’ rent with credit card during covid
aside from some dings due to high credit usage, my score is good. mainly because i have a shit load of cards i opened years ago, so my average account age is high.
I’m not a particularly responsible spender and have a shit ton of debt, but since I make the CC companies a bunch of money by paying balance transfer fees all the time, I’m profitable. So my score is high.
What a stupid world
The “free market” at work, folks.
My dad paid 140k to buy a lot and build a house about 25-30 years ago. It’s back up for sale…$475k. in that time, minimum wage went from $5.15 an hour to $7.25 in that save time frame.
People are still working 40+ hour weeks, and healthcare is somehow costs MORE, along with everything else.
I don’t fucking think immigrants had anything to do with any of that.
The role immigrants play is involuntary, so blaming them is asinine. But they do fit in the equation. An average American has little to no financial security (by design), leaving many in a constant state of desperation. If anything, immigrants are even more desperate to make a living away from whatever situation they were trying to get away from, thus willing to accept even lower pay. But on top of that, many are manipulated into a situation where they are trapped in an “illegal” status and forced to accept sub-minimum wages or get deported.
Make no mistake, the vast majority of immigrants arrive here legally, but are then victimized by our capitalist class. And in the end, they get blamed for the situation. Fuck that.
The class divide all over the world needs to be destroyed. But that will require solidarity amongst the worldwide working class who have been brainwashed into a completely illogical fear of their peers, just because of an imaginary line drawn by sociopathic fuckwit pedophiles, who do not, and never have, deserved anything even resembling respect.
