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.
They’re just waiting for the trickle down
Eat, drink, and be merry, for tomorrow we die.
It’s almost like the “services” are designed just for this…
Who is teaching them financial literacy in the first place? Because they aren’t being taught it in schools. Meanwhile, these predatory companies do everything they can to convince people to use them.
Cool, except I was very clearly talking about the financial literacy to not do things like get suckered by a predatory lender.
Why are you against that?
This is the level of discourse at this point. Someone makes an observation or a comment and people think responding with a meme is a “gotcha.”
No wonder everything is fucked.
The label on the on the guy being explode talks about paying your staff a living wage. Basically, it’s a dunk on arguments that raising the minimum wage would loose jobs.
And it had absolutely nothing to do with what I was talking about besides the term “financial literacy.”
If you don’t think it’s sensible to teach young people to avoid predatory lenders before it’s too late, just say so. Otherwise this is irrelevant.
You cannot budget your way out of poverty. “Financial literacy” is just capitalists kicking the can down the road.
I think it is highly unlikely that all of the Gen Z people getting these loans came out of a life of poverty.
It’s not, though. Financial literacy includes things like, not spending money you don’t have. When you take these predatory loans to get goods, you end up more enslaved to the capitalist system and to those who have money to lend.
Financial literacy is not a cure-all, just like normal literacy doesn’t make you understand Shakespeare.
And they call them predatory loans for a reason. They are coming to you and they are going to hurt you. But we don’t teach kids this before they get into the adult world and this is the result.
Coming soon: Predator Loans Vs Loan Sharks
In cinemas just as soon as we pay off our bills.
Yeah, and financial literacy alone may not get you out of poverty, and it definitely won’t get everyone out of poverty, but among those with the possibility of class mobility financial literacy will play a role in where they wind up.
You cannot budget your way out of poverty
That really depends on how you define “poverty”. Traditionally, poverty is determined by a household’s income, family size, and the cost of living where they reside. Since we’re talking about debts here, it seems like “poverty” is being used as shorthand for “being poor”.
Some people legitimately experience poverty, where their income is simply not sufficient to cover the basic costs of life. Others have an income that could cover all of their needs, but they routinely waste their money on things that they don’t need.
“Financial literacy” is more than just a capitalist buzzword. There is an element of individual responsibility, and plenty of people shirk that responsibility.
- Understanding that your daily McGriddle habit is more expensive than cooking your own breakfast every morning
- Understanding that taking the bus to work will save you big on gas and parking costs.
- Understanding that every dollar you spend, whether it be credit or debit, is going to be cash that you have to pay eventually.
- Understanding that putting money in a rainy day fund has a guaranteed reward, while buying lottery tickets does not.
- Understanding that your money at rest is depreciating in value if it’s not properly invested.
- Understanding even the most basic aspects of investment. You don’t need to be born with a silver spoon in your mouth to understand how a CD or money market account works. You just need to be motivated enough to talk to the bank and open the right accounts.
While it is certainly true that our capitalist society has created systems of exploitation that deserve to be condemned, it doesn’t preclude Americans from doing their best to understand that system and protect themselves from it. When I see young people destroying their finances with BNPL apps, I see exploitive financial institutions manipulating young people into taking on debt, but I also see incredibly gullible young people who are clearly not taking the “pay later” part of the deal seriously.
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?
If your outlook on life is “work until you die with nothing left over”, might as well take back something first. The debt will pile up one way or another.
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.
What else are you going to do? Save for a house who’s price rises faster than you can earn money?
And meanwhile your bank or brokerage gets to play with that money for a real investment return
And the wage earner’s taxes will be used to bail them out when they make a bad bet
Yeeeup. Socialism for me, austerity for thee
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
(since no one can afford a house even with perfect credit)
They assume they’ll have bigger problems, and they may be right. But it’s should still be concerning.
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.
lol time to write an article vilifying young people who somehow aren’t thriving in our flawless economic system. What self-indulgent idiots they are. Where’s my Pulitzer?
If were going to slip into a period of hyperinflation then taking on tons of consumer debt is just good financial planning.
This is correct, although usually you’d want to go into debt on something like housing but let’s be honest, that’s not possible. Why not pay an 80 dollar door dash across four payments?
Isn’t that only if wages increase alongside inflation
Oh no. If a fistfull of trillion dollar bills will buy you a shot glass of rice that maxed out credit card from the before time is pointless either way.
If $1,000 today is worth $5,000 tomorrow, you want to spend that $1,000 today so that when you pay up you only pay $1,000. Even if inflation hits you, you still only owe $1,000 no matter how much actual value those dollars still hold.
You can actually survive without streaming services and online subscriptions.
Is this today’s avocado toast?
Man imagine the privilege of worrying about not having streaming services as an essential need.
It’s today’s variant of “beans and rice cost, x. So why are you complaining about food cost?”
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Why isn’t this framed as predatory lending?
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.
For the same reason that the subprime mortgage crisis wasn’t; line go up.
Because Capitalism demands exploitation
doesn’t mean we need to blame people (victims) rather than the organizations
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.
After ending genocide at home it just exports it.
It’s not just American, it’s very British too.
Klarna is a Swedish company.
Ah, the great American Dream. Pull yourself up by your bootstraps and work hard to
enrich the millionaires profiting off your laborearn that $0.12 raise you’ve been asking for.
Well when the world is about to end in multiple ways at once, why with about debt?
Keep on buying plastic shit, I’m sure it’s gonna be fucken great.
Dumb gen Z
It’s the 1% vs the working class, not generation vs generation.
I agree 100%.
Every article about “gen z is terrible” or “boomers had it so easy” should be viewed as a way for capital to divide labor.
Boomers are the reason gen z has it so bad.
Being misanthropic means you can blame all of the generations
It’s all well and good to blame the generation that can’t afford shit to use payday loan companies to buy shit…but when these companies align with the likes of Dominos Pizza to allow you to buy a pizza and pay off in several weekly installments, maybe it’s time to blame prices for being ridiculously high?
Pizza is not a necessity and adding predatory marketing doesn’t help. The whole point is to extract money from as many as possible including the ones that really cannot afford it.
Pizza is not a neccesity but at the end of the day we can’t expect everyone under 30 who doesn’t have well off parents to live on beans and rice. People aren’t robots and while no individual luxury is a neccesity, luxuries as a whole are a neccesity to some degree.
