Often1

This is an unsecured personal loan. Period.

No idea what the interest rate ranges are because that is not set until the passenger completes the application and the TILA disclosure is provided.

Given the costs of originating a one-off loan, these are likely to be a bad deal as compared to a CC. Thus, for people who lack the cash or revolving credit to pay for a ticket.

Default here is no different than default on any unsecured personal loan. But, what is important to understand is that people who lack the credit to obtain a low-interest CC will likely use most of the credit available to them with this loan. Thus, leaving them in trouble if they have other important expenses to finance, e.g. car repairs.

malgudi

Huh? That isn't quite the same as spending beyond your means to go on a vacation

downinit

A well-endowed portfolio is of no use to someone who is dying/terminally ill/etc, but memories of a life lived to the fullest can bring a lot more peace than a pile of saved money that one will never get a chance to spend, especially for those of us without kids or dependents. I definitely agree that high APR unsecured loans and HELOC's are a lousy way to finance travel, but I would counter that travel brings at least some of us more joy than any other potential expenditure. I am grateful that I have plenty of CC's to charge my airfare/hotels/etc to, allowing me to earn bonus points and purchase an amount above what my current cash on hand is (not counting long-term savings). I almost always pay them off within a month or two (depending on how complacent/lazy I am at the time). But some people are not in such a position, so at least they have other options available. I would prefer to see slightly less predatory APR, but that is what you get when banks pay off politicians to deregulate everything. Fear not, as I am fairly certain that the banks will not be losing any money in the long run; the risks of abuse have clearly been factored in. Hopefully, they will use judiciously, but that is not for me to concern myself over. Besides, the banks and courts can claw back your ATV's, boats, and 6 bedroom home; however, only death, dementia, or a massive head injury can take away memories of a trip (or two) of a lifetime.

CApreppie

Just a reflection on the crazy amount of debt and small amount of savings that most Americans have.

Often1

There are a lot of people who buy/lease cars the same way. They don't even know what the total price for the vehicle was. All they look at is the monthly payment they see circled on a sheet slid across the table. Same thing here. There may even be people who could make the ticket purchase on a lower interest CC who don't think of it that way and use this payment plan because the numbers look manageable.

Whether the purchase is a good idea is entirely subjective.

SWCPHX

AA's option to fly now pay later is 0% interest as long as the balance is paid within 6 months. IIRC

STS-134

If you don't have the cash for plane tickets, you should not travel. And that's especially true if you can't get the cash in a cheaper way that via an unsecured personal loan.

narvik

Ha! How true:

Used car sales person: "Buy this car for $199.00"
or
United: "Fly business class, EWR-CPT return for $199.00"

<puzzled>

"Oh, $199/month for 48 months."

TomMM

Just encountered this for the first time and for me it just has a slimy feel.




You can see the interest rate ranges by clicking the "?":

narvik

Up to 36% APR.
A real bargain!

Often1

That is only because it is the maximum APR which may be charged in many states, California included.

narvik

The thought of financing a UA flight over 12 months at 36% gives me hives!

It's bad enough to foot the bill upfront, but to think someone has to relive the experience 12 times......YIKES!

TomMM

Royal Caribbean has better rates!