Buy Now Pay Later?
Is it me, or has everyone else noticed that everything these days allows buying now and paying later? Affirm, a publically traded company is the bank that empowers online shoppers with paying solutions. I just don’t see this ending well. There are levels of living beyond one’s means. Sounds like a juicy rationalization, right?
There was certainly a time in our lives when we could barely live within our means. We had credit cards with absurd interest rates but eventually found out that was better. We tried really hard to pay off what we bought each month, but it isn’t easy when you want more than you can afford. The hope is eventually, you catch up and don’t get into trouble.
When I see all those opportunities to buy 25% now and put the rest on credit with a pay later plan, I think about the mortgage crisis. The first few years are a deal until you can’t pay the exploding number and default hangs over your head. That is not good.
But somehow, we do it again and again. Why? Here is a state I read last week. One-third of consumers who opted to buy now, pay later plan have fallen behind on at least one of their payments. Um, that’s not good. Where does this end up? Do the number just work for Affirm? Do they end up taking what was purchased if it isn’t paid? Some of these things are clothing. No value there.
This might be something that becomes quite ugly when we get to the other side of Covid.