Posted on 12/08/2024 7:56:07 PM PST by SeekAndFind
An Associated Press report dug into “buy now, pay later” programs and the problems they can cause. They can be particularly attractive to people with poor or no credit histories. There’s been press over the years arguing that the Gen Z demographic — those born between 1997 and 2021 — has been particularly enamored of the arrangements and that somehow it is putting them in debt more than any other generation.
Except, they aren’t.
Let’s start with BNPL programs. In theory, they can sound fine for someone without available credit, or who doesn’t want to use up more: installation payments that sometimes can be completed without interest. As the Consumer Financial Protection Bureau explained, the loans generally ranged from $50 to $1,000, spread across four payments. There are late fees if the buyer misses a payment and there can be fees for declined payments. Some plans include interest or finance charges.
Originally big with online purchases of goods, the concept has spread out to cover “travel, pet care, and even groceries and gas,” the agency wrote previously in 2022. “Apparel and beauty merchants, who had combined to account for 80.1% of originations in 2019, only accounted for 58.6% of originations in 2021.” Acceptance rates rose from 69% in 2020 to 73% in 2022. Ordinary credit has recently hit record-high rejection rates.
The Associated Press looked at the question of BNPL. They reported that consumers can overextend themselves and things get worse if the consumers use credit card
(Excerpt) Read more at forbes.com ...
How about “Earn money now, buy later?”
My son and his wife found themselves in the perfect storm.
Medical bills and car repairs hit simultaneously, depleting their small savings account. They have been married 2 years and have been carrying their apartment and bills with no problem, including maximum contributions to their retirement accounts while building savings.
Then the kitten, a birthday present for my son, got into the pantry and into the chemicals. My daughter-in-law was distraught because she was the one who accidentally the pantry door open in the morning while putting together her lunch for work and found the kitten lethargic and mewling miserably when she came home.
She called me in tears.
I told her take the kitten (who is loving, playful, and quite adorable) to the emergency vet. Once she had a diagnosis, have them call me. I gave my husband a heads up and he agreed; we would pay for the kitten’s bill - $450.
They are back up to $2K in savings, a now healthy kitten hitched a ride with my kids to my house for Thanksgiving, and everyone was happy.
It was the first time they asked for anything since they got married. I was happy to help.
On the flip side, I know young people who are lounging around all day, not working, sucking off their parents. I have no respect for them and wouldn’t give them a dime.
Sounds like a great family there, and great parents!
I feel for Gen Z because the article is wrong.
the average credit card rates are 25-35% now
I never remember that before.
they do not teach maths in school anymore especially not how interest works, or how to do a budget.
what jobs can kids get today ? I know kids with degrees that get paid and treated like utter crap.
Usery should be illegal.
Lenders should not be able to offer secured car loans at 25% or 29% but they are and they do.
I remember MORTGAGE rates of near 18% in the early Reagan years.
Tell me again about how current credit card rates are worse than that.
Of course they are.
“ I remember MORTGAGE rates of near 18% in the early Reagan years.
Tell me again about how current credit card rates are worse than that.”
Reagan years. What?
My parents house was 82k in the Reagan years when they downsized. Taxes in that hood were 5k per year. Now the house is 1-5 mil. Taxes 20 k per year. What does the interest rate matter? They had mortgage insurance. When my father died my mother owned the hose. Boom.
I paid $4k for my entire science degree. That school is 40k tuition now
$800 for a VW bug then 3 k for a nice Japanese car that got me around for the next 5 years. Cash
The apartment I had in Manhattan was 200 per month
I saved a boatload of money. Bout this house for a quarter of what it’s worth now
My friends’ kids are all paying 450 k for crap houses. Everyone works. I stayed home with my kids
These grammar school
Aged kids and the toddlers all have a 1,000 yard stare. No one’s there for them. Moms work. Law school. Med school. No school trade school military. All of them
Some millenials I know are now making enough money to think they can afford anything while, in reality, they can’t.
I am well and truly blessed.
Sometimes when I see “Gen Z” I think it’s a rapper.
And I cannot remember the generation’s names and dates. There are 5 generations of Congos, maybe I’ll get them T-shirts with their generation names for Christmas when we all get together again.
My first house I bought in 1974. Brand new 2 bedroom ranch with a garage underneath on 2 acres, $24k. My payment was $84 a month through FHA. It doubled in 1976 and we sold because we couldn’t afford it.
Pets and cars are the needless financial burden on Gen Z. Show me someone poor-mouthing on FB about needing “food for my kids” or a “good Christmas” and I’ll show you a houseful of animals and a car payment.
I remember the 18 % mortgage rate as well. it only lasted a short time before beginning to fall. I do not remember credit card rates of 29.99% however.
Interest rates were capped at 18% back then, at least in NC. My CC has a 28% rate but I have never paid it.
Bless you for saving that kitten. Pets give a lot of joy, and give us the opportunity to make the world a better place for some innocent creature.
Two months before her wedding date, the transmission on my daughter’s car blew up. Since they were planning on dropping much of their individual savings on the wedding, I offered to help her with the trans. I didn’t need to. Her brother stepped in before me to offer the money.
Besides some small interfamily loans, none of my four kids carries any debt at all.
The son who helped on the car cost had about $30,000 in school debt which he scrimped and saved and paid in full within one year. (Kinda helps when you get a degree in a real field that pays real money and has real jobs.)
A few months before my husband and I got married, my car gave up the ghost.
We used part of our planned honeymoon money as the down-payment.
Then his car became unreliable. We used the other half for his down-payment.
Our two weeks in the Bahamas changed to a weekend in the Hamptons pretty quick.
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