Amazon starts no-interest payment plan option for Kindle Fire HDX tablets

This is lame. They may not do credit checks but obviously this can't cater to those with no credit or bad credit. You MUST have a credit card, and they charge you 25% of the device down which can be a lot pending on which device you get. Those who have credit will likely opt for something else entirely. I just don't understand who this caters too? Someone who's almost maxed out their credit but has just enough to want a kindle...

Originally posted by Mysttic:

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This is lame. They may not do credit checks but obviously this can't cater to those with no credit or bad credit. You MUST have a credit card, and they charge you 25% of the device down which can be a lot pending on which device you get. Those who have credit will likely opt for something else entirely. I just don't understand who this caters too? Someone who's almost maxed out their credit but has just enough to want a kindle...

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I can almost bet that you could use a debit card attached to your account to pay for the device. They don't have to have a credit check because the use of the device is collateral for the interest free "loan".

"I can almost bet that you could use a debit card attached to your account to pay for the device. They don't have to have a credit check because the use of the device is collateral for the interest free "loan".

(Shrugs), not about to try it myself, already got myself a new cell, that's good enough for me. If others can find a deal with that, good on them I guess.

and how many people are just going to use a pre paid visa jailbreak the thing and tell amazons book store to go jump off a cliff

Reading some of the comments, I think, some might try to jailbreak the thing, but the target consumer, in my opinion, are the ones that normally would not buy such a product given the price point. I think it is smart strategy on Amazons part, to gain some of those people as well. The only downside issue I can see, is purchasing of apps and/or books. I cannot see them selling that many products, if they are going after people that need to stretch out payments.

There is no such thing as zero interest.

Originally posted by Azuran:

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There is no such thing as zero interest.

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its got my wondering if its same as interest free here.$800 item at just 24 payments of $80 or something similar

Originally posted by Azuran:

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There is no such thing as zero interest.

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Well if you pay full price it is $229. If you use payment option it is 4 payments of $57.25. 229/4=57.25.

Originally posted by klassic:

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Originally posted by Azuran:

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There is no such thing as zero interest.

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Well if you pay full price it is $229. If you use payment option it is 4 payments of $57.25. 229/4=57.25.

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No.

If an interest rate of 0 is stated in a finance agreement interest must be imputed. For most companies the risk free rate of return is the going rate of T-bonds (although some wealthier companies may use a higher rate because they can reliably and consistently earn a higher rate of return) For our purposes let's say 2%. We'll also stick with simple interest since using present value techniques on a loan term of 1 year or less is immaterial.

$229/1.02 = $224.51

So Amazon will report sales of $224.51 (implied fair market value) and interest revenue of $4.49 on each kindle sold.

Of course they don't tell you any of this because then they would have nothing to advertise.

Edit: Numbers are not exactly correct because I forgot to subtract the initial payment and reduce the % based on the life of the loan, but the point is still the same.

Originally posted by xboxdvl2:

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Originally posted by Azuran:

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There is no such thing as zero interest.

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its got my wondering if its same as interest free here.$800 item at just 24 payments of $80 or something similar

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Yep.
It's call it:
Layaway.- is an agreement in which the seller reserves an item for a consumer until the consumer completes all the payments necessary to pay for that item.

No-Interest is a "miss-type" 'cos the use of a C.C.
I guess the name for this "New Agreement" is call it: Auto-Layaway !?