Buy now, the wage later comes with its risks, experts warn

Buy now, pay the payment solutions later Popularity has increased in the current economy, as the industry is expected to grow by 12.2 % on an annual basis to reach $ 122.26 billion this year alone, according to research and markets.

By 2030, the subsequent market in the United States is expected to reach 184.05 billion dollars.

The main players are confirming, after me, and Klana, which is scheduled to make a preliminary general offer on Friday and list his shares on the New York Stock Exchange under the symbol “KLAR”.

The companies rose to the forefront at a time when the Americans were He competes with continuous inflationHigh interest rates and student loan payments, which resumed in October 2023 after a temporary stop due to the Covid-19 pandemic.

Experts warn of the hidden risks to purchase now, and later pushed

Consumers benefited from platforms because they allowed them to pay equal installments for a few weeks or months. In many cases, they are also free of interest.

Buy now, the subsequent services to pay in the retail sector have become. However, it has become increasingly integrated into the travel, health care and electronics industries, which increases the provision of food for consumers looking for flexible financing options.

Online holiday spending is $ 222 billion, driven now, and paying subsequent options

A survey in March Wallethub found that about 55 % of Americans have now used the purchase of payment services later (BNPL), with 22 % due to the money to the BNPL provider.

Among those who used the service, 19 % got multiple loans at the same time last year, and 19 % incurred late fees or interest after that Payment loss.

A separate investigative study in Bankate revealed that more than half of the adults who used the service faced issues such as excessive spending, missed payments, and the buyer regretted.

These results confirm that although BNPL services provide flexibility, they also carry risks depending on how to use them.

“Sometimes, it is a viable method to reach reasonable credit and spread the impact of the great purchase. At other times, it is a ticket to excessive spending,” said Ted Rosman, Industry analyst in Bencrit. “We can deceive ourselves to focus on installments instead of the overall cost of ownership, which can lead us to too much spending.”

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Buy Now, the payment services later conducted itself as a kind of credit cards “which can come at high interest rates. However, Rossman said the service” is behaving with more credit cards over time. “For example, confirmation and Klarna contains discount cards that can be converted into installment loans.

Moreover, Rosman explained that the service “is no longer just four interest -free payments for six weeks, as many of these plans continue for a longer period and shipping interest rates similar to credit cards.

In addition, consumers can also get late fees if they do not have money to cover installments. Maralaland, Marlyland, told Maryland, Fox Business that over time, if the consumer continues to lose payments, they may be easily delivered to the debt collector,

“It is similar to the use of a credit card where you buy now, but when it is time to pay this debt, if you do not have the money at hand,” said Callen. It can hurt a person’s credit.