Gen Z is drowning in debt as buy-now-pay-later services skyrocket: 'They're continuing to bury their heads in the sand and spend'
Gen Z is drowning in debt as buy-now-pay-later services skyrocket: 'They're continuing to bury their heads in the sand and spend'
Internal data shows member credit card balances are up more than 50% for Gen Z and millennial members since March 2022, when the Fed started raising interest rates.
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.
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Why isn’t this framed as predatory lending?
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Because Capitalism demands exploitation
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If were going to slip into a period of hyperinflation then taking on tons of consumer debt is just good financial planning.
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This is correct, although usually you'd want to go into debt on something like housing but let's be honest, that's not possible. Why not pay an 80 dollar door dash across four payments?
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In this age where you can quickly spend thousands online (or even in person) without having to actually watching any of it disappear, and corporations are hiring psychologists to make their services and platforms as addicting as possible, you're gonna get a lot of this
I see everyone in the comments saying that Gen Z have checked out and are waiting for the end but I really don't think so.
I think it's never been easier to manipulate a person to separate them from their money and things are deliberately designed that way. Big shiny upgrade now buttons, services forcing you onto 7 day free trials for premium plans upon signing up, expensive yearly subscriptions for products that ten years ago would have been unthinkable as anything other than one time purchases, you name it. Capitalists have used the internet to minmax their penny pinching.
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to take this a step further, imagine someone who has been exposed to these services designed to be addictive their entire (digital) life, as well as being pushed further into these services by their peers who are equally addicted and the "influencers" they look up to that are paid by these services.
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Is this actually worse than the five figure credit limits gen x had extended to them? Boomers had store layaway, which really seems ideal for holiday shopping, but there's no money to be made with it so of course it's fallen out of style.
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five figure credit limits gen x had extended to them
chase gave me a $17K limit before i was even 20 in the 90s. i know more than a few people who would have had that maxed out the next day
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Does it matter. It seems that a lot of them have checked out already as they see the world burning around them.
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Hard to blame them.
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When you think there's no future, there's no need to plan for one.
Gen Z knows that they're gonna have bigger problems than debt.
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What else are you going to do? Save for a house who's price rises faster than you can earn money?
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One big recent consequence is it destroys credit short term, like less than a decade.
It's recoverable, but every one counts as a new line of credit, which automatically gets closed about a year after payment.
So unless you also have a lot of zombie credit cards, it's going to keep debt utilization waaaay up, number of accounts waaat up, and keep average age of accounts low.
This snowballs, especially if they ever do but a house. If they day ever comes, they're going to lose alot of money again.
It's like experiencing turbulence on a place so you scream YOLO and start playing Russian roulette.
If the plane goes down, it doesn't matter. If it's normal no big turbulence, then it's just as much an increase in risk as playing on land.
They assume they'll have bigger problems, and they may be right. But it's should still be concerning.
We got a while before kids are unironically bumping this tho
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This snowballs, especially if they ever do but a house
They know this will never happen. They're not buying houses. They're renting until they die on an overheated planet that no one wants to do anything about. Where one party rolls coal and the other pretends that the inflation reduction act makes up for the harm caused by the record oil production they brag about.
They know they're fucked, and there's no reason not to take on as much debt that they can't pay back as possible.
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Yo dawg I heard you like installments:
Recently I noticed my credit card lets me move transactions into installments. So, you can put an installment into installments now. When you go bankrupt you can pay off your debt in installments too.
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Eat, drink, and be merry, for tomorrow we die.
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Predatory debt gonna be predatory
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genZ is the least empathic gen i have seen yet. gives me hope future generations can learn from that.ql