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.

  • Randelung@lemmy.world
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    3 days ago

    If the outcome is the same whether you save up or not - you’ll never be able to afford anything - why now “own” things while you can?

  • renrenPDX@lemmy.world
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    4 days ago

    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.

    • partial_accumen@lemmy.world
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      4 days ago

      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.

    • Whats_your_reasoning@lemmy.world
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      4 days ago

      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.

      • renrenPDX@lemmy.world
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        4 days ago

        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.

    • d00ery@lemmy.world
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      3 days ago

      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.

  • Ensign_Crab@lemmy.world
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    4 days ago

    When you think there’s no future, there’s no need to plan for one.

    Gen Z knows that they’re gonna have bigger problems than debt.

    • givesomefucks@lemmy.world
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      4 days ago

      One big recent consequence is it destroys credit short term, like less than a decade.

      It’s recoverable, but every one counts as a new line of credit, which automatically gets closed about a year after payment.

      So unless you also have a lot of zombie credit cards, it’s going to keep debt utilization waaaay up, number of accounts waaat up, and keep average age of accounts low.

      This snowballs, especially if they ever do but a house. If they day ever comes, they’re going to lose alot of money again.

      It’s like experiencing turbulence on a place so you scream YOLO and start playing Russian roulette.

      If the plane goes down, it doesn’t matter. If it’s normal no big turbulence, then it’s just as much an increase in risk as playing on land.

      They assume they’ll have bigger problems, and they may be right. But it’s should still be concerning.

      We got a while before kids are unironically bumping this tho

      https://www.youtube.com/watch?v=vG1CuunXLsI

      • Ensign_Crab@lemmy.world
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        4 days ago

        This snowballs, especially if they ever do but a house

        They know this will never happen. They’re not buying houses. They’re renting until they die on an overheated planet that no one wants to do anything about. Where one party rolls coal and the other pretends that the inflation reduction act makes up for the harm caused by the record oil production they brag about.

        They know they’re fucked, and there’s no reason not to take on as much debt that they can’t pay back as possible.

        • givesomefucks@lemmy.world
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          4 days ago

          They assume they’ll have bigger problems, and they may be right. But it’s should still be concerning.

        • RangerJosie@lemmy.world
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          4 days ago

          Actually yes. Yes it does.

          The poor are poor cuz they don’t work hard.

          Can’t budget to help the homeless cuz some of them might trade food stamps for drugs.

          If you didn’t want that baby you should have kept your lega closed.

          Blaming the victim is as American as genociding the indigenous. Happens all day every day. Because this is the bad place.

    • Blackmist@feddit.uk
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      4 days ago

      I’m not sure because it definitely is.

      The whole selling point of services like Klarna is they don’t show up on your credit checks, meaning you can very easily take on too much debt.

  • sp3ctr4l@lemmy.zip
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    4 days ago

    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.

    https://www.nbcnews.com/business/personal-finance/buy-now-pay-later-daily-essentials-groceries-young-adults-rcna141718

    • DeadWorldWalking@lemmy.world
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      4 days ago

      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

      • vonbaronhans@midwest.social
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        4 days ago

        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.