Nebraskans warned ‘buy now, pay later’ could bury you in debt this Black Friday
LINCOLN, Neb. (KLKN) —Due to elevated prices for food, rent, gasoline and other essentials, shoppers are being more selective this Black Friday.
Today’s shopper is very savvy when it comes to shopping around to find not only what works best for them, but the price that goes along with each product.
Many are selecting cheaper options and rather than dipping into their savings, shoppers are turning to “buy now, pay later” services.
Those services allow shoppers to make payments in installments rather than footing the full bill upfront.
Experts worry that most shoppers won’t recognize the risk that comes with the service.
Buy now, pay later services are being used to purchase everything from sneakers to gas in installments.
Programs offered by companies like Affirm, Afterpay, and even PayPal have become increasingly popular, especially among younger shoppers who are trying to avoid credit card debt.
The problem is, even if your agreement doesn’t have interest attached to it, you could still get hit with pricey late fees that impact your credit score.
Those late fees can run as high as $34 with the prices climbing if you miss additional payments.
The Consumer Financial Protection Bureau says Americans took out $2 billion in buy now, pay later loans in 2019. That number skyrocketed to $24.2 billion in 2021.
Experts say people who cannot afford to pay or who are not sure if they would have the money shouldn’t fall for services like this.
Pastor Tom with People’s City Mission says those in need are usually the ones who suffer more financially during the holidays.
“It really hits those who are struggling the most. Because they become hand to mouth,” Pastor Tom said.
He says people struggling financially can feel the extra pressure that comes with being expected to spend on gifts.
“I would encourage people that are struggling not to go into debt,” he said. “At our Help Center they can shop for free. A lot of our stuff is new.”
People’s City Mission has a help center that works like a thrift shop, but items cost nothing for people in need.
Pastor Tom says it is a good opportunity for those who cannot afford gifts.
