The Buy Now, Pay Later Bubble Is About to Burst

[nara1892]

-snip-

I think you are lucky because there is not so much "Buy Now Pay Later" there. What I know now is that many people around me are using this, yes it looks helpful if we use it very wisely. But this will be disastrous for us if we only use it for things that are not considered important.
My neighbor uses Buy Now Pay Later, but he uses it for business. Yes, he opened installments for other people, but he used the BNPL, things like this are profitable because he can see business opportunities without spending capital. But what is a pity is the person who credits it, because the costs incurred will be greater than the price of the goods.

Well, there is a good reason some people think credit is a trap and living on it is a new form of slavery.
Unfortunately, there are folks who do not have much option and end up acquiring debt beyond their capacities, also I believe the fact BNPL purchases do not affect the credit score of the clients only helps for people not to meditate on the consequences of its abuse and facilitate recklessness.

There are some consequences indeed and of course there are positive and negative sides.
On the positive side, this can still help if it's only done once or twice, but with conditions like this it actually makes people forget that they have to pay in installments and prefer shopping using that.
In my country now there are many conditions like this which actually cause a sizable debt in the end because they are not aware of using a method like this, especially when past the specified time limit there is usually more interest to be paid which makes this a little difficult.

[mvdheuvel1983]

Budgeting is the answer to everything. It shouldn't matter when you pay for something if you have already set aside the money to do so. Just exercise financial restraint—something that many people struggle with.
Interest under the Buy Now, Pay Later policy begins the day you make the purchase. Interest increases.

[DrBeer]

Let me disagree with the assessment.


so that the system is quite beneficial to everyone - the consumer, the financial sector, manufacturers, sellers. Without the movement of money - the economy begins to die ....

But we don't know how many of the people used the feature wisely to tackle their temporary financial hardship by splitting the bills and paying in multiple installments but my assumption is mostly people used it to buy luxury items which are not really needed for them but for the sake of pride statement and buy now pay later is same as credit card trap but covers almost everyone even who doesn't have credit line to have one so they opt for these kind of small installment plans and trapped them.

I agree with this completely. There are people who manage their finances logically and buy really necessary things using preferential mechanisms with convenient payment schemes (such as installments with 0.1% per annum). And there are people who buy on CREDIT, expensive "trinkets", to give themselves a higher status, as a result, they have neither status, nor money, nor a chance to break out of this vicious circle

[crwth]

Wouldn't it be weird not to be indexed toward consumers' debt? Because it will just be "delayed" and will still be billed, the problem is that the thinking of people trying it out makes it seem that they still have the money and would probably spend more than will rack up more debt.

The logical way of approaching these people interested in BNPL is the following.

• Make sure that you have the budget
• Check the Terms and Conditions of the issuer.
• Track your spending

There might be unexpected problems that can be encountered with this. I think some of these financial aspect should be studied by people in order not to have problems with the financial system.