Pay-over-time loans may increase long-term debt risk for young people – NorthJersey.com | Vette Leader

TikTok user @asweetceleste posted a video of an online shopping cart totaling $318, but with Afterpay it would be split into four payments of around $68.

“I lowered the total a bit, but with Afterpay it seems so much more reasonable,” the caption reads. “Should I do it?”

“Buy now, pay later” services like Afterpay, Affirm, and Klarna are instant point-of-sale loans that break down the cost of a purchase into a payment schedule paid over a few weeks or months. However, credit experts said that missing a payment can send the consumer into a spiral of debt, riddled with late fees and increased interest rates.

These point-of-sale loans are often advertised as safe and accessible alternatives to credit cards and other lending services because they typically do not charge interest or have a harsh credit check. According to a survey conducted by LendingTree in April, more than 40% of Americans say they have used a “buy now, pay later” service.

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