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.
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.
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.
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.