Americans are struggling to make ends meet. Increasing numbers of people living in the United States are now using “buy now, pay later” for necessities such as groceries.
A new research report suggests that the rising popularity of buy now, pay later could push those already struggling into a much worse situation. While many are already struggling to pay off debt, the BNPL scheme could bury them.
“Financially fragile consumers”, or those defined as having a credit score under 620, who have fallen delinquent on a loan, or were declined for a credit application in the past year, were nearly three times as likely as financially stable consumers to use buy now, pay later (BNPL) five or more times last year, according to new research from the Federal Reserve Bank of New York.
According to a report by Yahoo Finance, financially vulnerable households were also more prone to rely on short-term installment loans at a higher frequency to afford smaller, unexpected expenses.
“We can’t dismiss the potential risks of overextension, where frequent use of BNPL funding leads to excessive debt accumulation over time,” New York Fed researchers wrote in a Liberty Street Economics blog post.
While BNPL provides shoppers with the flexibility to pay for goods and services over time, usually with zero interest, the Consumer Financial Protection Bureau (CFPB) has identified several areas of potential consumer harm associated with its growing use, including inconsistent consumer protections, and the risk of excessive debt accumulation and over-extension. –Liberty Street Economics
As the global and regional economic debt-based fiat currency systems continue to erode, so does the purchasing power of everyday people. Remember, this will never affect the ruling class or central bankers, as they will simply continue to add digits to their bank accounts while stealing the fruits of the slave classes’ labor while calling it “taxation.” This grand scheme will continue for as long as it takes for human beings to realize that they are slaves to whichever government claims the right to tax them.
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