Summary
Gen Z is increasingly relying on “buy now, pay later” (BNPL) services for holiday shopping, with spending projected to rise 11.4% this year, totaling $18.5 billion.
These services appeal to younger consumers with limited credit histories but can lead to overextension, as they lack centralized reporting and encourage overspending.
Experts warn of accumulating fees, particularly when BNPL plans are tied to credit cards.
With inflation and rising credit card debt already burdening Gen Z, consumer advocates caution that these services may worsen financial instability despite their convenience.
This is really interesting. Layaway purchases in stores used to be popular but went away in the late 90’s. It’s back now as BNPL, with much worse terms.
Layaway purchases in stores used to be popular but went away in the late 90’s. It’s back now as BNPL, with much worse terms.
Lawaway is superior. Laywaway had zero interest charges. Some places charged a flat fee, but you also didn’t get your item until the full balance was paid. There’s no chance of a lawaway purchase spiraling into a huge expense. The expense is fixed at the time of layaway and never gets higher. Lawaway also builds the ability to delay gratification, which is an important life skill that is sometimes not common.
BNPL has none of that consumer protection.
Correct me if I’m wrong, but wasn’t the key difference in layaway that you didn’t have access to the item until it was paid off? I remember my mom putting holiday gifts on layaway at Walmart. They’d be kept in storage in the back of the store, and would be given over only after they were fully paid off.
Buy now/pay later plans allow the consumer access to the item now, with a payment plan to follow. It’s much more akin to credit than layaway.
Yes. You had the honor of reserving the item from sale by paying more. BNPL is like the boss in its final form. You can have but don’t own it. Maybe it’s more akin to old furniture places with leases.
https://www.retailmenot.com/blog/walmart-layaway.html
Walmart actually just stopped layaway entirely in 2021 for BNPL.
In the UK the Littlewoods catalogue is the one I remember. You’d end up paying well over the RRP with a year or two of monthly payments.
Or those tv rental shops.
Stuff like this is why the headline Econ stats do not actually reflect reality.
Sure, there’s lots of room for critiquing how the media and the investor class focus on stats that are not actually representative of things on the ground for fairly complex mathematical/economic reasons, but that conversation requires people to have a Masters on Econ to understand.
What does not require this is the much simpler: They do not take personal debt levels and credit scores into account.
People say things like ‘inflation is going up’ ‘i cant afford as much as i used to’ and … the main actual reason for this is usually that they’re drowning in debt, but are either unaware or don’t want to admit it.
This is a country where 54% of adults read and write at below a 6th grade level. Probably a comparable amount can’t actually do their own budget.
…
It doesn’t matter if your wages go up 2% in a year if you had to spend that year buying groceries on credit to not starve, and those all have 16 to 36% interest rates.
Systemic issues can only be solved with systemic changes.
No amount of shaming individuals will fix systemic debt issues, if this is such a large trend that it effects most of the generation then it can only be fixed with systemic changes.
The narrative that individuals are responsible for widespread debt is propaganda meant to shift blame off of the rich people causing wealth inequality to skyrocket
I don’t think their comment was about shaming individuals, but rather pointing out that there are individual level factors that economists don’t take into account when measuring economic health.
Its not even ‘individial factors’ in the sense that everyone faces unique situations that are not captured by data.
These credit / debt amounts are obviously captured by credit agencies, banks, etc., sold off to data brokers, either anonymized or not.
How else would any credit check occur?
A BLS economist could easily work these in to existing top line numbers, or make a new headline index.
Income Sans Recurring Debt Payments (car, house, consumer debt, student loans, etc)
Average
Median
Percentiles / Buckets / Brackets
Household/Individual
By Age
By Sex
By Location
By Gross Income
By Education Level
…etc.
The data is there. The math is not that hard (for an Economist or Data Scientist).
They just don’t.
It’s lieing by ommission.
I wonder if this research is done but not picked up by media.
I’m honestly not sure. I have the means to check but not the time-energy, unfortunately.
Maybe a few times a year a story makes it fairly mainstream in terms of internet news, but it almost never trends amongst popular streamers / youtubers / podcasts, or airs on TV.
Credit Karma or some other credit agency, or maybe some non profit or academic research will show up, as this article is…
… But the data obviously exists to be able to study and work into a new metric, which could be reported probably at a monthly pace, worst case, quarterly.
Lies, damned lies, and statistics.
The BLS does, I think? have some very rough aggregate stats on consumer debt levels, but nobody reports on it the way business news orgasms every time the jobs print and CPI come out…
Systemic issues can only be solved with systemic changes.
Blaming any individual for their outcome in a system that creates these issues distracts people from the cause of the issues, wealth inequality.
That’s why choosing to obsess over individual choices is totally useless and literal propaganda keeping people from correctly focusing their frustrations
No clue how you read myself shaming individuals into what I wrote.
I was writing to explain why everyone feels poorer than all the headline Econ numbers say we should feel.
Why all the libs who spent the last year or two telling us ‘the economy is fine actually’ were just factually wrong, functionally gaslighting everyone.
If anything, I call out the media, media friendly ‘economists’ and business people for perpetuating bullshit.
Obviously a general explosion in personal debt levels is a general, systemic problem with systemic solutions?
…
I am all for systemic solutions:
Tax the Wealthy / Tax Corporations
Get rid of student loans, do free tuition
Do a total debt jubilee for those below I dunno 200% poverty income threshold
Cap all consumer credit instruments of all kinds at 3x the Fed Rate
Raise the threshold of income for SNAP and LIHEAP and EITC, etc
Implement universal healthcare, outlaw private insurance, lower costs
Raise the minimum wage
Rent control, automatically expunge all eviction records after 1 or 2 years, actually fund building public housing, write a law that says if a house or condo is on market, unsold, you must drop its price by 5% for every 3 months it remains unsold…
Blah blah, tons of things we could theoretically do.
Only systemic changes will fix systemic issues.
… Are you a bot, or do you just have extremely poor reading comprehension?
Can you explain how me stating that a whole bunch of people have a lot of debt … implies I am blaming them individually for this?
If I told you that black men are much more likely to be sentenced heavily for the same crimes, abused or killed by cops… would you think that means I am implying that that is their fault?
If I told you that trans people have higher suicide rates… am I also implicitly saying that is their fault?
How…are you reading a causal or morally prescriptive blame into these statements that are just data, just statistics… after I have already stated that obviously these are systemic problems that require systemic solutions?
If you understand that these systemic issues will only be solved by systemic changes then that’s it.
Idk why you keep replying
BNPL services are downright criminally exploitive. The fact that I find Klarna logos on restaurant menus is completely insane.
Taking on debt to pay for large purchases can make sense. Buying a car with cash is impossible for most people, but paying off a car note over several years gives you the chance to buy the car without fronting the cash first.
But this whole industry is built on the idea that you can just borrow from your future self to fulfill yourself today. Quite frankly, if you don’t have the money to eat out at a restaurant, you shouldn’t be taking on debt to do so.
It’s one thing to have a credit card where you pay to improve your credit score, or earn rewards. Ideally you are using credit strategically, even if you’re using it for most/all of your daily purchases. It’s another thing to have a restaurant menu literally tell you that you can “pay for this meal in 4 easy payments”. They’re openly asking you to keep buying luxuries even when you’re too broke to foot the bill.
My credit card is just a proxy for my debit card, with benefits.
I thought everyone used theirs this way, I tell friends I have a credit card and they gasp.
Like wtf, it’s only as dangerous as you are. Use it, pay it. In, out. Ez pz.
It’s not just a matter of how big the purchase is. The you next year still who still pays for the car will also still be using the car. The you next month who still pays for the meal would have already pooped the meal.
Also I’ll add that there are some things that feel wrong that they just aren’t prepared for you to pay cash for. My audiologist was shocked when I asked him to put my hearing aids on a single debit payment and we had to break it up into three payments. My car was two payments one a day after the first. I was raised to save up for expenses where possible and avoid debt for anything but cars, houses, and education (and hoo boy did I get a lecture on expected income vs price of degree).
And I have to say that these issues are a combination of systemic and cultural. You don’t get this being so common with it being an individual failing, and you don’t get the situations I’ve described or the issues with debt avoiders getting screwed when we look to get a rare responsible loan without it being systemic. But also you don’t get people casually splurging with money they don’t have without it being cultural. Fiscal responsibility isn’t fun or sexy (though actually I have found a casual partner more attractive for the fact that she has retirement savings and minimal debt), but after decades of propaganda encouraging wasteful lifestyles and fiscal irresponsibility I think it’s time we engage in a multi prong approach to this problem. And that very much includes teaching the average American how to live a more frugal lifestyle while also making sure that they can get what they need (housing, transit, education, community participation, cultural enrichment, etc) at an affordable cost to their income.
Yeah, it’s pretty fucking insane the things people are taking on debt for. I genuinely can’t understand it. I mean, I know we live in a society that’s pretty fucked from capitalism and inequality and stuff isn’t easy, but it is common sense to avoid debt as much as possible. Do they just think the money is free?
It’s almost like the “services” are designed just for this…
I mean, we’ve been telling them their entire lives that the planet is doomed, and they have no future… So why the fuck not bring on the debt?
Because rampant over consumption is the reason the planet is doomed.
There is no ethical consumption while living a capitalist way of life.
It isn’t a black and white issue though. There is more ethical and less ethical, but less ethical tends to be cheaper and easier.
The entire idea that individuals are responsible for these systemic issues is propaganda meant to distract from the rich who actually cause the problems
The responsibility is shared. Temu wouldn’t exist if nobody bought from them. Yes, people need clothes, but nobody is forced to buy them from a fast fashion company that is generating enormous amounts of waste. 🤷
Systemic problem can only be fixed by systemic changes, no amount of fixating on individuals will ever fix a systemic issue
True enough, as is the visit it before it’s gone. Yes, the Great Barrier Reef is dying from emissions and the resultant rising temp but fuck it, fly across the planet.
Well when the world is about to end in multiple ways at once, why with about debt?
Who is teaching them financial literacy in the first place? Because they aren’t being taught it in schools. Meanwhile, these predatory companies do everything they can to convince people to use them.
You cannot budget your way out of poverty. “Financial literacy” is just capitalists kicking the can down the road.
