Buy now, pay dearly?
When Amelia Schmarzo's dad helped set up a credit card for her to use while away at college, he told her it was only for essentials and emergencies. And Amelia barely touched the card ... until she discovered a new kind of payment called "buy now, pay later."
The pitch was simple: get whatever you want now, and pay it back in four, interest-free installments. Suddenly, Amelia started buying all kinds of things using buy now, pay later. And she failed to notice that her small installments were quickly piling up. It only took a month before her credit card was maxed out.
Buy now, pay later companies like Klarna, Afterpay and Affirm have taken the country by storm ever since the pandemic fueled an online shopping explosion. But offering customers the option to pay for anything from clothes to oral surgery in interest-free installments sounds almost too good to be true, right?
Today on the show, what exactly is buy now, pay later? And should we be worried?
Music: "Retro Funk," "Comin' Back For More," "Reactive Emotion," and "EAT."
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