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?’”
A high end sandcastle kit?
Sounds like a GREAT reason to over borrow.
So you shouldn’t take super high interest loans to buy crap online?
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.
Nvm it was clearly unavoidable.
That report also found Black consumers were 65% more likely to borrow on BNPL than the general population, followed by Hispanic consumers (47%) and female consumers (35%).
Also racist and sexist 🤡
So you shouldn’t take super high interest loans to buy crap online?
In Netherlands they limited the maximum interest rate. Plus borrowers should check if people are credit worthy without that credit score. Basically it is assumed there are enough people who are terrible with their finances. The last bit is preferable over victim blaming.
I have a 800-810 credit score. I have positive networth. I have no mortgage, no student loans and one car loan with less than 5k left. The best interest rate on a credit card i could find was over 18%. I didn’t actually apply so the rate might go lower but still, that’s criminal imo.
Credit unions offer much lower interest rates. My credit card is 10% interest, and 8% for cash advances.
All credit cards are 0% if you pay the balance in full every month. Then it’s just a matter of if the perks are worth the fees (if that’s not something you’re already taking advantage of).
Edit: reworded to not use the word balance twice in different contexts.
Many of them have ‘hidden’ fees, annual charges etc that add up to a hefty chunk. Interestingly the credit cards offered to high net worth individuals (rich people) have much lower rates and no hidden fees, even things like automatic overdraft protection and robust identity theft protection not offered to the rest of us.
I had a 7.99% fixed card for a long time. Then after having a few kids we didn’t use it for a while and I went back to look at it they had raised the rate to 15.99% (this was years ago now). We also have credit over 800. Absolute garbage (yes, I know it’s in the TOS). Dropped them and changed companies to get the same 15.99% rate with other perks since the original didn’t have any.
These CC companies seriously need more regs. They can’t be trusted to do anything in the interest of consumers and don’t deserve their business anymore, quite frankly.
It says in the article that the loans aren’t high interest. They’re low to no interest.
The main issue is parents (and the school system) aren’t teaching kids about budgeting and how CCs work because they don’t know how it works either. It’s perpetuating.
$800 on a day trip to the beach?? Thats insane to me.
Also never understood why anyone would you those options, they have always seemed like trap. Have some self control
