Break Out Money Guys

Category: News

  • Best Buy Quietly Discontinues Upgrade Plus: What Happened?

    Best Buy Quietly Discontinues Upgrade Plus: What Happened?

    Best Buy’s Upgrade Plus program is gone. No announcement, no warning — just quietly removed. If you were hoping to upgrade your Apple device under the plan, you’re out of luck.

    What was Best Buy’s Upgrade Plus program?

    Upgrade Plus launched in 2022 as a way to finance Apple tech over three years. It started with MacBooks, but eventually included iPads, Apple Watches, and desktop Macs. The program offered a low monthly payment with a balloon payment in month 37, which could be handled in three ways:

    1. Return the device and upgrade to a new model under a fresh three-year plan.
    2. Return the device and exit the program entirely.
    3. Pay the balloon payment and keep the device.

    If you chose to return the Mac, Best Buy covered the final payment, making upgrades seamless. You could also exit the program at any point but paying off your full balance. In theory, it was a great deal — but the program didn’t even last long enough for a single upgrade.

    Best Buy has quietly killed Upgrade Plus

    Now, Upgrade Plus is no longer available. Best Buy has removed all references to the program from its website, and it isn’t an option at checkout anymore. There’s been no official announcement, leaving customers wondering what happened.

    The only official response has come from Citizens Pay, the program’s financing partner. In an email, they confirmed that customers must continue making payments and remain responsible for the balloon payment at the end of the term. The associated line of credit has been closed, preventing any new purchases. However, it remains unclear whether Best Buy will still honor the Upgrade Plus trade-in policy to waive the final payment.

    Why did Best Buy shut down Upgrade Plus?

    While Best Buy hasn’t publicly addressed the shutdown, the most likely reasons include:

    • Low adoption: If not enough people signed up, it wouldn’t make sense to continue the program.
    • Low profitability: Covering final payments for returned devices may have proven too costly.

    Online discussion about the program is limited, and there appears to be some confusion about how it actually worked. In response to a Reddit user’s question, some commenters dismissed the program as a waste of money for participants.

    While the program implied 0% interest, it’s unclear if every customer who qualified received that rate. Those who did effectively divided a large upfront cost into 36 smaller monthly payments, with a larger payment at the end to keep the device.

    What does this mean for Best Buy’s future?

    The discontinuation of Upgrade Plus isn’t just about a failed program — it’s a red flag for Best Buy’s future.

    The company has struggled to adapt to the adoption of eCommerce. While its stock price has remained stable, its revenue has been declining since 2022. The company got a temporary boost from the pandemic, but now it faces a lack of differentiation. Upgrade Plus was one of the few incentives encouraging customers to buy Apple products from Best Buy instead of more direct or convenient alternatives.

    Without a clear strategy to set itself apart, Best Buy risks following the path of Blockbuster — a once-dominant retailer that failed to adapt before it was too late.

  • Bank of Japan Raises Interest Rates: What It Means for Investors

    The Bank of Japan (BOJ) recently announced that it would be raising interest rates for the second time this year. Stocks fell on the news, but have showed signs of a slight recovery.

    What happened?

    On July 31, 2024, the BOJ announced that it would raise its short-term interest rate to 0.25%. It had already raised rates from -0.1% to 0%-0.1% in March 2024, signaling an end to the BOJ’s decades-long zero interest rate policy to encourage borrowing and spending.

    Why it matters

    The Bank of Japan’s decision to raise interest rates is significant because it carries substantial implications for U.S. stocks and bonds. A higher interest rate in Japan may lead to a stronger yen, which can influence investor behavior and capital flows.

    Carry trades

    This financial practice involves borrowing currency with low interest rates, like the yen, and investing in higher-yielding assets such as U.S. stocks and Treasury bills (T-bills). The total value of carry trades is estimated to be $1.1 trillion since the end of 2022, meaning that any unwinding of these trades could significantly impact various U.S. stocks.

    Treasury bills

    These short-term government securities have maturities ranging from a few weeks to one year. If investors pull borrowed yen and return it to Japan, demand for T-bills may decrease, leading to higher yields. Increased yields can affect borrowing costs for businesses and consumers, potentially slowing economic growth.

    Conclusion

    The recent pivot from the BOJ is likely to impact not only Japan’s economy but also global markets, particularly U.S. stocks and bonds. As investors adjust their strategies, it’s important to be aware of the potential volatility over the coming weeks and months.