Written by Bryan Lutz, Editor at Dollarcollapse.com:
If only it were old news. Like inflation…
“Buy now, pay later” schemes are growing in popularity.
Soon to cause the creative destruction of businesses and consumers everywhere starting with retailers everywhere.
You know what they look like.
It only took a quick search of the internet to find some of the “best” money advertising you’re probably used to passing by…
Wondering how those “businesses” can stay alive.
You know the kind…
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It’s risk free!
Satisfaction Guaranteed!
You pay, $120 and get $100 in your pocket.
Now the service is being taken online, but…
A word of warning: It *could* be a problem.
CNBC reports:
Why buy now, pay later debt could become a problem for the U.S. economy
“Buy now, pay later options are becoming more accessible to consumers. A quarter of Americans surveyed in April 2024 said they used buy now, pay later services in the past 12 months, according to a recent report from NerdWallet.
The number of buy now, pay later loans increased nearly 1,100% between 2019 and 2021, according to data compiled by the Consumer Financial Protection Bureau.”
All that’s needed is to download an App on your smartphone and you have access to Klarna, Afterpay, Zip and PayPal. All of them have buy now, pay later schemes.
Plus, many online retailers have them built right into their checkout pages.
It makes you wonder, though.
Since there’s still rising inflation and people need money, will online buy now, pay later schemes put retailers like CashMoney Loans to the pages of history?
Maybe not, consumers will always need money…
So, what does the debt market look like for consumers?
NerdWallet reports, “it’s no worries”:
2024 State of Consumer Credit Report
“In the past 12 months, 8% of Americans had to use BNPL to pay for necessities. Unlike credit cards, which may offer cash back or rewards, buy now, pay later services tend not to come with such benefits.
If using BNPL for necessities is a sign of financial hardship, many Americans don’t see that hardship subsiding. An equal share (8%) anticipate having to use BNPL for necessities in the coming 12 months, according to the survey.”
Who’s using buy now, pay later schemes the most?
Millennials and Gen Zers…
The chart shows “Buy Now, Pay Later Useage for Necessities”:
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CNBC points to the real concern:
“The notion of this phantom debt being out there is just not true,” said Penny Lee, president and CEO of the Financial Technology Association, or FTA. The FTA is a trade group that represents four of the largest buy now, pay later providers: Klarna, Afterpay, Zip and PayPal. “We know from publicly reported information how many folks are taking out loans and how many of them default. And it’s a very, very low number.”
Grein emphasizes that she does not think the debt is so bad that it will explode, but rather the concern is around not being able to track how much is out there and how many consumers are behind on payments.”
If regulators aren’t able to track how much debt is being loaned out, or who’s behind on their payments, why not look at this correlation?
Take a look at credit card delinquencies by age group and then look up at who’s using buy now, pay later for necessities.
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(source: wallethub)
The correlation speaks for itself.
Millennials and Gen Zers, the next generation set to advance America, are maxing out their credit cards and moving to Buy Now, Pay Later schemes to pay for needs, today.
The reason?
Millennials and Gen Zers were born into one massive, behind the scenes Buy Now, Pay Later scheme: centralized banking and an unlimited fiat-driven money supply.
Are these schemes ever risk-free?
Is fiat money ever risk-free?
In any event, it looks like fiat is what’s meant to advance America for generations to come.
