SilverChair

Have you tried Bill Me Later yet? What is it? I am thinking of using it.

sbm12

It is a short-term loan that lets you buy the ticket without the cash in hand today. Check the rates/charges/fees associated with it - you may eat up the $20 credit real quickly.

Seat13c

Here's the offer SilverChair was mentioning. (Click here)

Long Distance

What am I missing here? If you pay the invoice in 90 days or less there is no interest charge? Are there any fee's I am missing?

Seat13c

If I understand the system correctly, BillMeLater will buy the seat from B6, NWA, etc for a reduced rate (something like a 5% discount over public fares) when buys the full fare using BillMeLater.

ciaobel

My understanding is that it is just an one time credit line - BML does not deals with inventory but will make money the same way as credit card: interest rate + fees is the payment is not done by the end of grace period

WSJ had an article a few days ago warning against in because BML runs credit check and frequent use will reduce the credit score

sbm12

Another bit of caution is that because you are not buying using a credit card you lose certain rights/protections that you might be used to from normal transactions with a credit card. Your rights to dispute a transaction are virtually nil. Your protection in case of cesation of operation by the carrier is nil. You get the idea.

defiance96

I guess it probably is an OK money maker for B6 to participate with this company as a payment option...but something about marketing it broadly like this seems slightly tacky/sleazy. I equate this company with the concept of pay-day loans. I know its much more on the up-an-up...but still...its probably a company I wouldn't want to co-market with like this. I think it detracts from the brand...even for a LCC like B6.

sbm12

Several other carriers have marketed with them recently as well. Doesn't make it correct, but at least B6 isn't alone. My guess is that BML is paying the marketing costs, not the carriers.

ciaobel

You are right in that one of the target segment of BML are those who low FICO scores and/or cannot obtain a regular credit card with good terms. No pay for 90 days actual is a pretty good carrot to make them come onboard.

BML's other target segment are those who do not have credit history - foreigners, new immigrants and young people. In this segment, BML actually does have a good value proposition versus paying cash.

For airlines, their goal is higher revenue and lower transactional cost. Higher revenue can be achieved by good targeting, which is the case with BML. Lower transactional cost depends on whether JBLU has a better deal with BML than with credit card companies - I would assume that JBLU has a better rate because the claim for refund is much less, if none.

BML is effective a sub-prime lending facility, and can be predatory. Case in example is that if you do not pay by full by 90 day, then on 91 day the interest will show up charging APR pro-rated of the full past 90 days.

For JBLU, it is only good business to offer an additional payment option with lower processing cost and no loss risk - I am certain that any loss incurred with default of payment will not go to JBLU (JBLU does not have the speciality in credit rating), and in return, JBLU would give up the upside of additional fee/interest income.