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.
Buy now pay later has been a thing since at least 2006 in the UK (I can find pictorial evidence for this with a flyer with “buy now, pay 2007”). But, I am quite sure I remember seeing this in the 80s and 90s too. For sure most large stores had their own credit systems that worked this way.
It’s not a new term, and actually I’m going to say that predatory techniques were more common in the 80s and 90s. People were definitely financially illiterate then too. Store credit was very common, I remember a very common APR was 29.9% with some pretty long terms on too. And the store credit system was of course designed in a way you could keep adding purchases, so you were ALWAYS paying this 29.9% year on year.
I think the only real difference was that with payments being far more physical without the internet. You could feel when you borrowed too much and people would cut back before reaching truly unrecoverable situations.
Point being, this isn’t a new thing. The virtualisation of everything I think has just made it much easier for young people now to get into situations they cannot easily get out of.
In the 80s and 90s you could easily get multiple credit cards. But usually you needed to go out and get them, or at least fill in paper based applications. There were also definitely less institutions offering them. So there was a real hard limit. Now there’s all kinds of ways to get credit. However, there’s few real large institutions at the top and I think they really should be coordinating centralised credit limits better.
My summary is, this isn’t new. Just the modern world has made it very easy to make it scale into higher debts now than it did before. That’s the only real difference.
The average youth of the 80s and 90s were not better at this IMO. (person that grew up in the 80s and 90s speaking here). There were just less opportunities pushed into your face.