many years ago when the first payday shop opened in the small town I used to live in, the curiosity killed this accountant, so I went in and got all of their paperwork, went back to the office and I calculated the APR (interest plus all fees) to be 428%.
I thought for a couple of minutes about changing careers, but I like to be able to sleep at night…
No but many sure do act the part. 
Edit: From that article (listening now) “But some economists see them as a useful financial instrument for people who need them.”
Economists seem to think only those that NEED them will use them, that’s not reality however.
I think I was trying to make this point earlier in the thread.
Indeed, there’s a justifiable place in this world for legal gambling, high-interest rate loans, and many other things that are fine in moderation.
As JD pointed out, the value of acquiring something “now” vs. later is subject to each person’s circumstances and subjective, hence why high (even “predatory”) interest rates are sometimes justified, though one could also argue that ethics should prevent a business from preying on both the “needy” and the “impulsive” … especially if they are high credit risks, not despite of it!
Perhaps expediting the outfitting of one’s home with SmartThings results in a insurance savings or a higher resale value or … well… I can’t think of too many really good reasons to go into debt for this.
Then again, to put this all into perspective:
SmartThings has pretty “frequently” offered 20% off sales. That discount pays for a year of interest at 20%, so it’s a wash, right?
I am glad I am not the only one who scoffed at this ridiculous announcement. IMO, it is a really lousy deal to spend money one cannot afford (if you need a loan…) on non essentials with an APR of any amount. When I want to spread out my payments I usually opt to using PayPal Credit as I can pay something off within 6+ months WITHOUT interest. If I go over the term, then I have to pay the deferred interest which is my fault and not a “gimmick” as I believe the flyer called it. Deferred interest is actually great if you can make sure you pay off your debt on time… it requires financial responsibility. No money is free so the lender takes a gamble giving free interest to those who pay the loan off on time knowing that a large number of people will not… I do not know if there are other reasons they do it so mine is just a guess. An interest free, or deferred interest option would have been a better announcement… That way we can buy our toys and not pay interest if we are responsible enough with our finances.
You could not have said it any better. I had to re-read the email 3 times because it’s extremely misleading. It certainly was marketed as a No-Interest offering, but if you read the fine print, it clearly does state APR is applied. I usually spread out payments via Best Buy for large electronic purchases from 6 months to 2 years and I always avoid paying interest by making the divided payments properly. I’ve used this to purchase for things such as Sonos, Hue and Logitech Harmony’s. It’s the only reason I ever shop at Best Buy pretty much. Interest only deals are a great idea for people who are responsible enough to pay it off before interest hits as it’s basically a free loan.
Without all of the people you deem as not responsible, you would never be able to get 0% interest. If the credit vendors are guilty, so are you.
@Mbhforum - I must have gotten a different email, the one I got it is very clear their is 10-30% interest. That isn’t fine print. Seriously, not arguing, trying to figure out of we got different emails.
Even when you checkout it is not fine print and pretty clear.
I got the same one. I guess I find the “buy now, pay later” sneaky because you can buy now and pay later with ANY credit card. You don’t need this loan to do that. The “pay later” led me to believe it’s interest free, until I saw the much smaller font about APR rates.
Zero interest payment plans have been offered for decades for large appliances. These aren’t depending on some people not making the payments, but rather it’s built into the cost of the appliance. For a long time it was the only way that place is like Sears could get people to buy a new refrigerator or a new washer before their old one had completely broken.
Some places, Led by Sears again, did it in order to get people to buy without using another credit card, because the store has to pay the credit card company a fee and they made up the difference that way.
As far as the “just use another credit card” argument, again, we’re seeing more of these kinds of plans coming into the marketplace right now because of the number of people between 18 and 25 who have no credit cards at all. If you want to get the Venmo group to make a large purchase, you may need to consider options which don’t require a credit card.
I agree of course with everyone who said that just using a Best Buy or Sears no interest plan would be way better. 
Ironically, I just read this article a few days ago in USA Today:
Some people can’t get a credit card but could get this at 30%.
@whoismoses - Credit vendors take advantage of those who can’t afford the money they (need to) spend, and I take advantage of the offers they extend to my benefit (not theirs). I only spend what I can afford to pay off, and I make sure not to pay finance charges. I have never paid one dime in finance charges other than for things like cars, and houses. This is what I was taught being “financially responsible” was. Obviously misfortune can happen to anyone and that, at times, justifies paying for loans with interest… ie: car breaks down and you are low on funds then you may have no choice but pay with a credit card and deal with APR…
Just as @Mbhforum pointed out, I too initially thought they were touting an interest free payment option (cause that is the only thing in my mind one would actually tout as a benefit) and only reading the announcement carefully did I notice the mention of interest charges. Home automation is a “non essential” in my case so paying interest in order to get it is likely not the most responsible way to spend my money… Those who have money to throw away likely do not need to pay this stuff with a loan that charges interest… so that leaves those who would likely do best to wait until they can afford to spend the money on cool toys.
Anyhow, I really did not want to start a debate on who manages money responsibly and who not. I certainly do not want to offend anyone either… Just hoping my words might help others stop thinking their purchasing power goes as far as their credit cards (or credit) allow…
@JDRoberts - If ST were to offer a 0% APR finance option where they pay for the interest as long as the loan is paid off within 1 year, then that would be an enticing option - as long as they do not increase prices to do so. I believe most businesses have built-in in the credit card processing fees that usually are between 1 and 4 percent (roughly?) so we all pay for those fees regardless whether we use credit cards or not… and this sucks. I was told that credit card companies have merchants sign agreements where they are not allowed to offer a discount (essentially what would go to the credit card company) if the customer pays cash!
So do I. I have amex with 6% back on groceries and pay it off every month because it’s 18% interest. But some have screwed up and have to rebuild. And if it wasn’t for some of these people would never get credit again.
The issue on whether a merchant can offer a lower price to someone who pays cash or not is legally really complicated and impacted by some very recent lawsuits ( by the merchants). It also varies state by state. I don’t want to go too deep into the weeds on that one, but here’s one article
As for the “cool toys” categorization, talk to a 23-year-old who had a bike accident and now finds themselves in a wheelchair. Or someone with a Child on the autism spectrum. I know home automation is just a fun hobby for many people on these forums, but it serves a different purpose for many people, some with unplanned for and unexpected needs.
Choice is good.
They did this year’s ago stopped and doing it again. It’s not new. Gas stations that is. I worked at one at 17 and they charged cash and credit price. That was 23 years ago.
@JDRoberts - I am happy to read the article you found and will certainly use cash when offered a better price. Also, I was very careful with my wording because I was thinking of you. Home automation is a necessity for you and I am sure it has made things a lot easier for you thus it certainly does not fall in the “non essential” or “cool toy” categories.
I work for a measurement and industrial automation company so in my case automating my own home has always been an un-affordable dream until I discovered ST.
A lot of gas stations still do this especially ones that have a lot of semi-truck traffic.
Credit card companies don’t make any money on people who can’t make payments. If they never have the money they will never pay. They make money on people who need to buy now, pay later.
His example was paypal which is likely getting very little from the purchase and more from the interest. I’m no in that industry but I may be wrong.
10’s of millions of responsible American pay interest to get a new car even though their old one is just fine.
They can do this, but the price for the $249 pack would be more like $273.9 which is the same as paying the interest.
I get it, I doubt may of us here would do this. Anyone that does either needs to for a very good reason or is too (substitute a better word for dumb) to listen to you anyways. This is about personal responsibility and education. I am 100% against outlawing these “predatory practices” and 100% in agreement with teaching this is middle school. I am amazed by people’s lack of understanding basic personal finance.
Incase anyone is interested like @michaelahess, there is a great podcast about home mortgages with 0% interest FOREVER. Not really, but it is very interesting.
I also take advantage of special financing.
I recently spent a bunch on supplies from lowes to remodel my master bathroom with 0% for 24 months. I gave up getting 5% off to do this, but it is worth it. I also got 4.6% back from ebates as we did it all online.
Yeah. I’m in retail and it cost 2.3% average of transaction amount. So it cost retailers to take cards. Walmart paid tens of millions i believe I read in cc fees.
For some it will be even more mind blowing that there are investments that pay a negative interest rate.
I’m such a pessimist that I only invest in these types of investments.
