this post was submitted on 29 Nov 2024
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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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[–] [email protected] 59 points 1 day ago (3 children)

I swear on everything that I've read this article word for word years ago but replace gen z with millenials

[–] [email protected] 32 points 1 day ago* (last edited 1 day ago) (2 children)

Every single Millennial also had those predatory debit card overdraft fees.

Banks would allow them to purchase something even if the checking account had no money and then hits them with like 25$ for every overdraft. Practice only outlawed in 2010.

God It was this feeling of helpless anger when banks would screw you while u are down. Thanks Obama for fixing that.

[–] [email protected] 26 points 1 day ago (1 children)

Oh it was far worse than that...

They would actually change the order of your transactions in order to maximize the number of overdrafts (and each cost $30+).

For example, say you've got $80 in your account. You buy three separate meals over the course of Monday and Tuesday, and you've got $50 left in your account. But now you remember that there is that one thing they NEEDS to be paid for, but it's $75 and you only have $50 on your account.

Well, you have no choice but to make the payment that brings you to -$25, and incur the single overdraft fee. Sucks, but $30 penalty is less than not having Internet for a month or whatever, so you do it.

So to recap: You had $50 left after those 3 meals. You made one single transaction that brought your account into negative, that means one overdraft fee, right?

Nope.

They would literally re-order the transactions, put the largest one first ($75), bringing your balance down to $5, THEN they would process the meals from Monday and Tuesday giving you THREE separate overdraft fees of $30 each.

So now you owe the bank $90 on top of the $25. And that was what the banks sold as, "overdraft protection."

Shit was disgustingly egregious. Obama made it illegal I believe.

[–] [email protected] 8 points 1 day ago (2 children)

I wish this "overdraft protection" was opt in so people at least have a chance to understand it. I turn mine off, deny my card who gives a shit

[–] [email protected] 4 points 1 day ago* (last edited 1 day ago)

Right, that's how they fooled people for years. Any normal person would think "overdraft protection" means, "deny the transaction so you don't overdraft." But nope, complete opposite.

It was so scummy.

[–] FarFarAway 2 points 1 day ago

They wouldn't let me turn mine off. The first bank flat out said no, the credit union charged me $5 to draft $100 from my savings. If there wasnt $100 in the savings, they would charge me the $5 to take what was in my savings and the $25 overdraft to cover the rest. There were no other options.

[–] [email protected] 3 points 1 day ago

Basically reddit 10-15 years ago. The doomsday edging gets stale when you realize things are cyclical. Millennials were supposed to implode with debt by now. An economic cycles or two later and that didn't happen. Now it's Gen-Zs turn to be on the brink of doom.

[–] [email protected] 11 points 1 day ago (3 children)

We didn't have this new term buy now pay later to the same extent, the millenials version just called credit cards credit cards.

[–] [email protected] 9 points 1 day ago* (last edited 1 day ago) (2 children)

“Buy now pay later” has been around for at least a decade. It wasn't ubiquitous like it is now though. I knew things were bad when I went to pay for 2 pairs of shorts and they asked me if I wanted to stagger the payments. The total cost was $40.

[–] [email protected] 5 points 1 day ago

Buy now pay later has been a thing since at least 2006 in the UK (I can find pictorial evidence for this with a flyer with "buy now, pay 2007"). But, I am quite sure I remember seeing this in the 80s and 90s too. For sure most large stores had their own credit systems that worked this way.

It's not a new term, and actually I'm going to say that predatory techniques were more common in the 80s and 90s. People were definitely financially illiterate then too. Store credit was very common, I remember a very common APR was 29.9% with some pretty long terms on too. And the store credit system was of course designed in a way you could keep adding purchases, so you were ALWAYS paying this 29.9% year on year.

I think the only real difference was that with payments being far more physical without the internet. You could feel when you borrowed too much and people would cut back before reaching truly unrecoverable situations.

Point being, this isn't a new thing. The virtualisation of everything I think has just made it much easier for young people now to get into situations they cannot easily get out of.

In the 80s and 90s you could easily get multiple credit cards. But usually you needed to go out and get them, or at least fill in paper based applications. There were also definitely less institutions offering them. So there was a real hard limit. Now there's all kinds of ways to get credit. However, there's few real large institutions at the top and I think they really should be coordinating centralised credit limits better.

My summary is, this isn't new. Just the modern world has made it very easy to make it scale into higher debts now than it did before. That's the only real difference.

The average youth of the 80s and 90s were not better at this IMO. (person that grew up in the 80s and 90s speaking here). There were just less opportunities pushed into your face.

[–] [email protected] 1 points 1 day ago

You can get now that's what I call music for 5 easy payments of 19.99!!

But I've not heard it called that until recently.

[–] teft 3 points 1 day ago* (last edited 1 day ago) (1 children)

You don’t have an Aaron’s or Rent-a-center in your town? I’m a millennial and half my formative years were spent on a rent-a-center couch and bed. Half my belongings in my first house were rent to own, now that i think of it. I spent a lot more because of interest and scams but i had zero financial literacy then and i needed furniture. Without a credit card your options were/are limited.

[–] [email protected] 1 points 1 day ago

I remember payday lending being a thing, rent to own on furniture rings a bell too, but I remember most of the focus being on credit cards and bank fees

[–] [email protected] 1 points 1 day ago

PayPal had zero interest payment plans as far back as like 2010. I'm actually a bit surprised it didn't take off sooner.