Don’t Let Buy Now, Pay Later Make Your Debt Problems Worse

Some of the habits we as a society have picked up during the pandemic are more useful than others.  Learning to cook your favorite restaurant foods from scratch is a habit worth keeping even when in-person dining is in full swing.  Conversely, doom scrolling has not done anyone any favors.  Buy now pay later (BNPL) purchase plans and apps are another popular pandemic-era trend.  Like many products and business models marketed to the 99 percent, BNPL has the potential to get people deeper into debt.  BNPL services advertise themselves as being no riskier than layaway while enabling consumers to enjoy their purchases immediately, but nearly a third of BNPL users have fallen behind on payments.  These types of services are so new that the Consumer Financial Protection Bureau has not yet developed policies to draw the line between BNPL as a service that consumers can use at their own risk and predatory lending.  If BNPL has contributed to your debt problems, contact a Plantation debt lawyer.

When BNPL Perpetuates the Cycle of Debt

Think back to your childhood when your dad bought a couch on layaway from the department store.  He probably carefully budgeted to afford the installment payments.  If an unexpected expense came up and he was not able to pay the department store as much or as soon as he had planned, the worst thing that could happen is that he would have to wait longer to get the couch.  Buy now pay later is like layaway except with instant gratification; you get the item when you make the first installment payment, not the last.  Unlike when you apply for a credit card, there is no credit check to see how likely you are to be able to keep up with the payments.

BNPL services are free when you are able to pay on time, but when your payments are late, they charge late fees or interest, which helps the people who need these services the most as much as it helps them that you get unlimited free drinks when you fly first class.  According to Jessica Dinkler of CNBC, nearly 45 percent of consumers have made BNPL purchases since 2020, and about 30 percent of them have fallen far enough behind on payments that it has caused them to accumulate debt.

In some ways, BNPL has the hallmarks of a debt trap for people who have no other means of buying things they need.  The CFPB has been investigating the worst trends in the BNPL industry, but it has yet to issue any guidelines about responsible lending and borrowing through BNPL services.  For the time being, BNPL is just another way to stay in debt.

Contact a South Florida Debt Lawyer About BNPL Debt

A South Florida debt lawyer can help you if your well-intentioned buy now pay later purchases have turned into so much debt that you are now weighing the options of settlement, consolidation, and bankruptcy.  Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.

Sources:

cnbc.com/2022/03/04/buy-now-pay-later-the-pros-and-cons-of-installment-payments.html

cnbc.com/2021/12/16/consumer-watchdog-takes-aim-at-buy-now-pay-later-programs.html