Unboxing shopping hauls. Vacationing at a luxury resort in Maui. Devouring a Wagyu steak sprinkled with gold flakes at the hottest restaurant in town.
Meticulously curated flaunts such as these are all over our social media feeds, making us want to have the same experiences. It is hard to resist the temptations because deep inside our psyche lives an invisible worm called FOMO (Fear of Missing Out). Many of us are not good at controlling it. With FOMO roaming free, we are always in danger of buying something we believe we must own. Can’t afford it? Not a problem. BNPL (Buy Now, Pay Later) is here to help. It spreads purchases into payment plans. For example, instead of forking over a lump sum of $2,400 for a short down jacket trimmed with fox fur, we can split it into 12 “affordable” monthly payments of $200 with zero fee. How wonderful! Let’s sign up now so we can bring this chic designer label jacket home today…
STOP!
“Buy Now, Pay Later” has its merits. Using it too willy-nilly though could trap us under a mountain of debt, not to mention the anxiety that comes with it.
Klarna, Affirm, and Afterpay are leading players in the BNPL market. However, in recent years, numerous major companies have entered the space with their own offerings, such as American Express’ Plan It, Citi’s Flex Pay, Chase’s My Chase Plan, PayPal’s Pay in 4, and Apple Pay Later. These options enable customers to convert purchases into monthly payment plans, often with minimal or no added costs. The allure of only needing to pay back a fraction of the original amount can lead customers to overspend on items like aesthetically crafted ceramic cookware or limited edition sneakers that are being heavily promoted by influencers. Social media feeds can do real damage to our psyche, making us feel inadequate, insecure, and missing out. That is when the invisible FOMO worm strikes, urging us to live large. So we spend with wild abandon, putting more and more purchases into BNPL payment plans. All is well until…
Imagine this: Each BNPL payment plan is a piece of domino. How many can we align before triggering the chain reaction of collapse?
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Many companies specializing in BNPL (Buy Now, Pay Later) boast quick approvals with no credit check. While using these services and paying on time won’t help build our credit history, as they don’t report positive information to credit bureaus, falling behind on payments will result in negative information being reported, thus damaging our credit.
Don’t let FOMO and BNPL become besties!
