Friday, November 29, 2024

Buy Now Pay Later

There is a new (to me at least) concept in FinTech called Buy Now Pay Later.  You can buy pretty much anything and then split it into 4 payments.  It is kind of like reverse layaway. The biggest company seems to be AfterPay, but there are a whole slew of these:  Affirm, Credova, Klarna, Uplift, Sezzle, Sunbit, Denefits, Zip.co, Quadpay, Payl8r, GoCardless, Clearpay, Paypal, Splitit, Amazon Pay, Zilch, Laybuy, Walmart One, Upgrade.  (Also add in things like Best Buy and Home Depot that offer no interest plans as long as they are paid off on time, but then will charge the full deferred interest if it is not).  They will charge a fee up front of up to 10%, but claim to be interest-free.  They charge hefty late fees and interest on late payments.  These are not reported to the credit bureaus unless a person is late.  The total balance due on these plans is more than $700 billion, which is phantom debt.  These can stop credit card companies and other credit analysts from discovering a person's true financial status.

A sub-category of this is payment for cruises:  Princess EZpay, Virgin Voyages Flex Pay, Uplift, Royal Caribbean (Affirm), Carnival Book Now Pay Later, Klarna.  You could go on a cruise paying only a small amount up front and without a credit check.  It seems risky to the cruise lines, but it is a way to fill cruise ships.

Read: https://www.newsmax.com/finance/streettalk/debt-credit-cards/2024/09/23/id/1181421/

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