I was browsing Amazon the other day and noticed that they now offer their own installment plans.
The deal is usually 5 equal monthly installments on an item at 0% interest. In the small print was that Capital One is blocking their card members from using this.
It’s certainly not difficult to see why a high interest credit card company that mostly goes looking for customers with FICO scores in the 600s would be perturbed at a system that allows those same people to make affordable monthly payments somewhere else and sidestep the 20%+ credit card APR, but I still kind of wonder what the long term gain here is.
Like all card companies, Capital One charges swipe fees, and if they block the installment plans on Amazon and Paypal then they lose that, and people who have so-so credit probably do have a debit card if nothing else, and could just as easily put that on their Amazon account and still pay no interest to Capital One. So I’m at a loss for why they even bother to do this.
I had read about this happening on My FICO Forums a few months ago, but I didn’t pay much attention. I wonder if other card companies will follow suit.
If the peasants realize that they can give up on the mountain of credit card debt that has them paying double on a pair of shoes or a new laptop computer, and actually pay it off and be in the clear someday shortly, who knows what will follow?
In my grandparents’ generation, people were so averse to debt that even if they could take it on, they usually didn’t, and did a layaway plan if anything. They might have gone for something like zero interest installments, but I can’t see anyone from that era putting small purchases on a credit card so they could pay double.
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