To think if you’re buying luxury goods on Klarna, you can’t afford them?

[ThatHonestOchreSloth]

It’s not classist. It’s just maths.

What about a mortgage on a property?

Did you not read the title to the thread? It couldn't have been clearer that this was about luxury items.

A house is an appreciating asset

Tell that to my neighbours who paid £300K more for their house in 2021 than it's currently on the market for...

Surely if you know a big event is coming up you save up in advance for it?

I've only had one or two Klarnas going on at one time for a larger purchase to avoid going into overdraft or using a credit card. I don't see the issue. There's no interest to pay.

I think it's a case of A) it's not what you say, it's how you say it and B) starting a thread then arguing every point with 'I didn't mean that' without actually saying what you dud bloody well mean!

The title was abundantly clear. It's not op's fault if people's comprehension skills are lacking.

I bought a sofa on interest free credit. It was £800, or £33 a month for 2 years. I could have paid in full but why not keep my money in the bank and pay the easily affordable 30 odd quid a month? It didn't mean I couldn't afford it...

Yes, interest free and it can help people build up a good credit rating.

A sofa is somewhat different from a luxury item though.

Fewer and fewer people can afford to save at all these days.

To those few people lucky enough to move into social housing, a sofa is very much a luxury item.

Exactly. As long as you aren't using them to build up unaffordable debt it doesn't matter.

Personally I earn a very good salary but don't have general savings as I'm loading everything I can into my pension and mortgage, and have one DD at university and one in late teens at home who we have just put through private tutoring and online school. It's an expensive time but in five years we'll be in a very good place financially, and I'll then be able to save in an ISA or similar as well as an instant saver and pensions. In the meantime Klarna can be helpful. It's temporary cashflow not overall affordability.

And that decision, assuming you had the rest of the £800 just sitting there in a decent 5% account after your payment each month, would have earned you...what... £40-£50 ish over that two year period?

I'm a fan of looking after the pennies so the pounds look after themselves but taking out a two year credit agreement that you didn't need, just to earn less than £25 a year, seems extreme.

Oh for goodness sake. That's just an argument for arguments sake.

The point is, debt for things you need, (and I would count sofas, and through my charity I often give grants for sofas) is very different from debt for the latest handbag /perfume / etc

And can also kill or damage a mortgage application.

Plenty of lenders don't look kindly on BNPL vehicles like Klarna on a credit report. Because they scream budgeting issues.

Yeah because they are paying off last month' klarna bill!

It's like there's some weird cognitive dissonance going on. If you can afford to pay off your klarna then you can afford to save up first.

This

This is nothing new. I can remember the same argument being made about hire purchase in the 1960s.

There was even a movie about it "Live Now, Pay Later".

YABU by the way, Nothing wrong with credit provided you use it sensibly and don't over-extend. We furnished our first house on credit.

No it isn’t.

There’s a charity local to us, mid-Scotland, that raises funds for disadvantaged people moving into social housing. They are given a bed, a basic fridge and a cooker. That’s it.

We’re downsizing and they will take every bit of furniture we can give them.

Some of their clients are working and services like Klarna mean that they can buy new and spread the cost, affordably, whilst building up a vital credit rating (some are ex-offenders who would really struggle otherwise).

You sound judgemental , if Klarna etc allows someone to spread the cost then great, life can be bloody hard for some so why not have a treat every now and then.
As long as you can afford the payments and you are in control whats the problem ?

If I can get something on interest free credit I will always take that option. While the money is in my account it’s working for me. If I give it all away in one go when I don’t have to I’m losing interest I don’t need to lose. That’s basic maths.

YABU. I've never used Klarna, but if someone can afford the repayments, they can afford the item- even if they couldn't afford to buy it outright. If they make the repayments, they will own it in the same way as someone who paid outright.

As to whether it's good to go into debt for non-essential purposes, that's a different question, but also applies to credit cards, overdrafts, car loans etc.

Would you not rather buy up front than sit on the floor for 3 months?

You've totally misunderstood the point.
Totally.

Yes, people don't always have a sofa. I bloody know that. Like I said, my charity helps people with grants for sofas, carpets, beds etc.. But it's not the point here. Not in the slightest.

The point is noone would begrudge anyone a sofa and it would be an understandable thing to get into debt for.

Similarly, for the same reason my charity doesn't pay for people to have a designer handbag or the latest perfume, it's very stupid to get into debt for those things.