The concept of an installment plan isn’t anything new, but the pandemic saw an explosion of “buy now pay later” brands, glamorized with the BNPL initialism. They’re great when you want to soften the blow of a big old purchase but not so great when they enable bad spending habits, tank your credit, and lack the consumer protections that genuine credit lenders have. On Thursday, SF Gate published an absolutely harrowing article about how these brands have capitalized on Gen Z. The stats are damning: 43 percent of Gen Z users have missed at least one payment, according to a survey by the polling site Piplsay.
In July 2021, the Consumer Financial Protection Bureau, in a warning to consumers, cited a Credit Karma survey that 42 percent of Americans had used BNPL services at least once, 38 percent had missed a payment, and 73 percent of those payment-missers had seen their credit score drop. But the services have been glamorized by influencers on TikTok, whose nonchalant BNPL shoutouts in haul videos may inadvertently punt shoppers into a deep, dark debt hole. In a report provided to SF Gate by Afterpay, 73 percent of Gen Z consumer spending is on fashion.
