After racking up thousands of dollars in debt, some borrowers are deleting the apps from their phones to avoid getting prodded to spend more.
Many consumers find buying now and paying later a godsend when cash is tight. Others are wishing they’d paid upfront to avoid pain later.
Tia Whiteside, 27, knew she was spending more than she would have without buy now, pay later services — the popular loans that let borrowers split purchases into installments with little or no interest. Planning a day trip to the beach with her 2-year-old son last year, she spent $800 on Amazon purchases including a tent, new outfits and a high-end sandcastle kit with the BNPL provider Affirm.
Whiteside, a Greenville, South Carolina-based behavioral analyst who treats childhood autism, makes good money; she and her husband bring in about $110,000 per year combined. But the $6,000 in BNPL loans she’d racked up over roughly two years felt frivolous, she said, especially because they’re planning to buy their first home.
“I was just seeing my paycheck continually eaten up,” said Whiteside, “and I was like, ‘Where’s my money going?’”
Indeed, and once she deletes the bnpl app, she’ll use credit cards to buy useless shit like she prolly did before.
I think me and you have been successfully clickbaited though, the journalist looked for such an extreme example to cause outrage, have the article linked on various aggregations, and be discussed.
The odd loophole these buy now pay later schemes have (or maybe had, I haven’t checked for a while), is that they don’t show up on your credit reports. This means more borrowing, and more opportunity to get in over your head in debt.
And then people get pushed into irresponsible borrowing, like its normal. You see ads for buying a fucking burger and paying it back over six weeks. I’ve seen tile shops that take Klarna as payment. Sorry to be Mr Old Fashioned, but by the stage of life where you’re buying kitchen tiles, you should have your financial shit together.
I mean sure, shit happens and sometimes you need £800 for a car repair or something so you don’t lose your job and fall into a cascade of debt, but $800 on a tent for a two day beach trip for a toddler? Give your head a wobble. He’d have had just as much fun two minutes down the road in a local park.
They don’t put a “hard enquiry” on your report, but it does show up as an open/closed account and will affect your score that way. Not badly necessarily; I bought some stuff with a loan from one of these companies and it actually helped my credit because it increased the number of accounts I have on file (I am one of those who doesn’t open cards etc if I don’t need them, so my credit mix has always been a bit anemic).