Buy Now, Pay Later: Difference between revisions

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==Why it is a problem==

=== Lack of regulation ===

===Lack of regulation===

BNPL's short-term payment plans and lack of immediate interest make it possible for lenders to operate outside the laws and regulations of traditional credit card companies{{Citation needed}}. In most countries, credit is defined by predetermined criteria that these BNPL fintechs purposely avoid, allowing them to act unregulated on mass populations around the world.

=== Ease of debt ===

===Ease of debt===

Many credit lenders offer soft credit checks and low interest rates to entice un-creditworthy consumers. While these practices do have some benefit, particularly for financially aware individuals seeking to improve credit, these enticements often bring in consumers who are more vulnerable. Buy Now, Pay Later lenders are especially egregious in advertising to vulnerable consumers, often advertising alongside necessary online purchases such as groceries. The lack of gatekeeping from hard credit checks and interest rates means that more consumers are accruing easily avoided debt.

== Examples ==

=== No safeguards ===

Credit card companies generally report to the major credit bureaus such as Experian, TransUnion, and Equifax. Without reporting consumer information, BNPL lenders avoid common safeguards like spending limits, which allows consumers to accrue hundreds of even thousands of dollars of debt that otherwise wouldn't have been possible.

==Examples==

*[https://www.affirm.com/ '''Affirm'''] to pay for your groceries.

*[https://www.afterpay.com/ '''Afterpay'''] to pay for gas.

@@ Line 9: / Line 9: @@
 ==Why it is a problem==
-=== Lack of regulation ===
+===Lack of regulation===
 BNPL's short-term payment plans and lack of immediate interest make it possible for lenders to operate outside the laws and regulations of traditional credit card companies{{Citation needed}}. In most countries, credit is defined by predetermined criteria that these BNPL fintechs purposely avoid, allowing them to act unregulated on mass populations around the world.
-=== Ease of debt ===
+===Ease of debt===
 Many credit lenders offer soft credit checks and low interest rates to entice un-creditworthy consumers. While these practices do have some benefit, particularly for financially aware individuals seeking to improve credit, these enticements often bring in consumers who are more vulnerable. Buy Now, Pay Later lenders are especially egregious in advertising to vulnerable consumers, often advertising alongside necessary online purchases such as groceries. The lack of gatekeeping from hard credit checks and interest rates means that more consumers are accruing easily avoided debt.
-== Examples ==
+=== No safeguards ===
+Credit card companies generally report to the major credit bureaus such as Experian, TransUnion, and Equifax. Without reporting consumer information, BNPL lenders avoid common safeguards like spending limits, which allows consumers to accrue hundreds of even thousands of dollars of debt that otherwise wouldn't have been possible.
+==Examples==
 *[https://www.affirm.com/ '''Affirm'''] to pay for your groceries.
 *[https://www.afterpay.com/ '''Afterpay'''] to pay for gas.