Executive Director of Qi Research and Chief Strategist Danielle Dimartino Booth identifies where inflation is the most difficult to hit consumers in ‘money making’.
Buy now, pay for a later payment solution They have increased in popularity in the current economy, with the industry predicting that they will grow 12.2% annually to reach $ 122.26 billion alone this year, according to research and markets.
By 2030, now they are buying now, it is predicted that the market will later reach $ 184.05 billion.
The main players are Affirm, Afterpay and Klarna, who will launch a starting public offer on Friday and list their shares on the New York Stock Exchange under the symbol “Klar”.
Companies rose to a prominent at a time when Americans were Faced with persistent inflationHigh interest rates and payment of student loan, which continued in October 2023. After a break due to the Coid-19 pandemia.
Experts warn hidden risks to buy now, pay later
Consumers used platforms because they allowed them to pay in equal installments over several weeks or months. In many cases, they are infinite.
The Swedish payment provider’s application is seen on a smartphone. (Jonas Walzberg / Picture Alliance via Getty Images / Getty Images)
Buy now, pay for later services have become a retailer in the retail sector. But it is increasingly integrated into the travel industry, health care and electronics, which further hosted consumers seeking flexible financing options.
Wallethub’s survey showed that about 55% of Americans have now used a purchase, paying later (BNPL) services, and 22% currently owes the BNPL Provider’s money.
Among those who used the service, 19% had more loans at a time last year, and 19% after fee or interest after missing payments.
Klarna’s app icon on a mobile phone decorated in London in the UK, on Thursday, January 21, 2021. (Hollie Adams / Bloomberg via Getty Images / Getty Images)
A separate research of bankruptcy has revealed that more than half of adults who have used the service have encountered problems such as excessive spending, missed payments and customer remorse.
These findings emphasize that although BNPL services offer flexibility, they also have risks, depending on how to use them.
“Sometimes it is a sustainable way to approach an accessible loan and spread the impact of a great purchase. The second time is a ticket for excessive consumption,” said the older bankruptcy analyst Ted Rossman. “We can be fooled to focus on installments, not the total cost of ownership, which can make us spend more than we should.”
Get a job with Fox on a clicking movement here
Buy now, paying later services have been advertised as a “more gentler alternative to credit cards” that can come with high interest rates. However, Rossman said the service “behaved more like a credit card over time.” For example, Affirm and Klarna have debit cards that can be transformed into installments for installments.
On top of that, Rossman explained that the service “is no longer just four careless payments for six weeks, and many of these plans lasted longer and charged interest rates similar to credit cards.
In addition, consumers can also be hit with late fees if they have no means to cover the war. Martha Callahan, a certified financial planner at the FBB Capital Partners based in Maryland, earlier told Fox Business to over time, if the consumer is not missing payment, can very easily hand them over to the debt collector,
“It’s similar to using a credit card you are buying now, but when it comes time to pay for that debt if you don’t have cash for payment. You just dig into a deeper financial hole,” Callahan said, adding that he added that he added that he added that it was may harm one’s credit.
