In the words of the late great Frank Costanza, “serenity now, insanity later.” And by insanity, we mean crashing out when all of your buy-now-pay-later (BNPL) installments come due on the same day.
Before you put that drunken Taco Bell order for 12 through Afterpay, reconsider. Just like the inevitable gas and bloating, everything always comes due.
Here’s Five Fast Facts on buying now and paying later:
- 🛒 Miss Me? - According to data from BNPL giant Klarna, many customers are riding the payment struggle bus. Missed BNPL payments are just the latest chapter in our nation’s rising consumer debt saga. Right now, American consumer debt sits at just over $18 trillion.
- 📉 Pay? No Way - Roughly four out of every ten BNPL users say they’ve made late payments in the last year. That’s up from one out of three reported last year. Another one in four BNPL users say they hopped on board because it was easier than getting a credit card.
- 🥕 Dangling Carrot - Who uses BNPL the most? Younger shoppers and Black and Hispanic women. However, people of all income levels are using apps like Klarna and Afterpay. One sneaky way BNPL apps lure users in is by flashing the option to pay in four at checkout. Vulnerable customers take the bait.
- 🌮 Taco Hell - Back in March, millions of burrito lovers started using Klarna for DoorDash. Tea was also spilled that over half of Coachella attendees paid for their tickets through BNPL. When interest rates are high, BNPL providers advertise as being a safer bet than credit cards. However, when you miss a payment or default altogether, you’re still in a debt mess.
- 🥊 Gloves Off - Under the Biden administration, regulations allowed the Consumer Financial Protection Bureau (CFPB) to treat BNPL companies the same as credit card companies. This protected borrowers from forced automatic payments and being charged multiple fees for the same missed payment. However, the Trump administration said they won’t be enforcing the regulation.
🔥Bottom line: Picture this: you’re on a date with someone who defaulted on their burrito loan. Live Más, or smell ya later? When it comes to finding a mate, debt is a major deal breaker for some Americans. Would you date someone in the red or let it slide? Find out what the rest of the country thinks in this article!
How often do you buy now and pay later?
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