According to a new survey by Accumulate savings.
BNPL is rapidly gaining momentum as an alternative payment option, with its global transaction value reaching $120 billion in 2021, according to a new report from GlobalData. And the sector is expected to continue to grow — Projected GlobalData the BNPL market could reach $576 billion by 2026.
BNPL’s suppliers – such as Affirm, Klarna and Paypal – are partnering with retailers to allow shoppers to split the cost of their online purchases into installments at checkout. These interest-free payments are usually due a few weeks after the time of purchase. However, missed payments may result in late fees and other penalties.
In order to avoid these fees, some Americans, especially younger generations, are using credit cards to make payments, according to the Accrue survey. About 44% of those who used BNPL missed a payment.
About 38% of Gen Z borrowers have used a credit card to make their BNPL payment, according to the survey. The same is true for 44% of Millennials, 36% of Gen Xers and 21% of Baby Boomers.
If you’ve taken out BNPL loans but are now struggling to repay them, a personal loan could help you consolidate your debt payments and avoid late fees. Visit Credible to find your personalized interest rate without affecting your credit score.
BNPL’S INCLUSION IN CREDIT REPORTS CAUSES INCREASING CONSUMER CONCERNS AND INVESTIGATIVE CLAIMS
Millennials and Gen Z have financial health issues
Amid today’s tough economic times, 50% of Millennials and 43% of Gen Z said they were overwhelmed with saving money, according to the survey.
The survey showed that 50% of respondents engage in risky financial behavior. According to the survey, 19% emptied their savings accounts, 18% avoided paying bills, 18% took out too much credit and 10% followed bad financial advice.
But when it came to impulse purchases, there was a limit. The survey showed that the magic number consumers started stopping at before buying was $50.
“Millennials and Generation Z have experienced constant economic uncertainty: Entering the workforce during a massive economic downturn, Millennials struggled to gain financial stability and were hit by a tidal wave after a tidal wave of world-shattering events,” said Michael Hershfield, Accrue Founder and CEO of Savings.
“Gen Z has had to deal with technology pushing for perfection, head-spinning US and global politics, and a looming recession,” Hershfield said. “Consumers want to prepare for an uncertain future, but the effect of the financial crisis that younger generations have felt is also very clear: they are spending beyond their means, they feel pressured to keep up appearances and they are anxious to save.”
If you are struggling financially, paying off your debts can be a good place to start. A personal loan can help you pay off your debts faster by combining your payments and lowering your interest rate. Visit Credible to compare multiple lenders at once and choose the one with the best interest rate for you.
APPLE’S CONSUMER DATA PROVIDES ‘COMPETITIVE ADVANTAGE’ TO BNPL, EXPERT SAYS
Regulators question BNPL security
Opening of the Consumer Financial Protection Bureau (CFPB) investigation in December 2021 to review the risks of BNPL services. He sent orders to several vendors to submit information that the agency could then release to the public in the interests of transparency. The CFPB said at the time of the survey that it was concerned about rising leverage, BNPL regulation and data collection.
“Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but also gets the debt immediately,” said the CFPB director. , Rohit Chopra.
Since then, some steps have been taken in an attempt to monitor BNPL providers and ensure that consumers only withdraw what they can afford to repay. Experian will its debut soon an office specifically dedicated to BNPL purchases and services, and aims to bring more transparency to the financial services industry.
If you have accumulated debt through BNPL programs, consider using a personal loan to pay it off and avoid late fees. Contact Credible to speak to a personal loan expert and get all your questions answered.
Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.