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StitcherThe wildest hocus pocus you’ll see this Halloween isn’t in the haunted houses, it’s how Buy Now, Pay Later is leaving people trapped in debt or with ruined credit. Jen and Jill share BNPL horror stories featuring real people and truly scary consequences and how to protect yourself if you’ve already swiped your way into one of these spells.
More loans just means more money for these companies, only at your expense.
The Illusion of Paying Later
Almost everywhere you shop, you’ll find a “Buy Now, Pay Later” option and people are getting increasingly hooked. What once felt like a smart budgeting tool is now being glorified, and while it might seem like an easy win, there’s always a catch.
Like Klarna who charges up to 34% interest, with late fees of up to $7 (capped at 25% of your order value) if you’re just 10 days late. Meanwhile, Affirm’s rates can climb as high as 36%, while Afterpay hits up to 25% of the order value, plus $8 for each missed payment. So it may seem like you’re saving, when in reality, you are just giving them your money.
Why Paying Later May Feel So Good
Jill says BNPL uses behavioral psychology to market to you without marketing to you. It uses present bias to make four smaller payments feel easier than one big one. She also adds that anchoring comes into play when “4 payments of $50” makes $200 seem cheaper, just like $9.99 feels less than $10.
Jen on the other hand says that by framing purchases as installments, BNPL tricks our mental accounting into viewing it as a manageable “monthly bill” instead of debt. Pointing out also that social proof when everyone’s doing it, it feels normal, blurring the fact that it’s still a debt.
What Next and What to Do
Jen reminds us that these companies aren’t going anywhere and they’ll only keep growing the more we borrow from them. As conscious consumers, it’s best to avoid these, because the hidden risks behind these predatory financial practices just aren’t worth it.
In the end, it’s better to lean into temporary discomfort. To save up and pay for things outright. Jen and Jill suggest pausing for 24 hours before buying, setting up barriers to make spending less convenient, and rewiring your habits to overcome impulsive purchases.
If your last purchase was split into 4 payments, what would those payments be
Jen’s is $29.50. It’s a big refill of shampoo. Jill’s is $21.39 for black tables.
Bill of The Week
Thanks Anon for sharing your bill about $1100 to $400!
Thanks so Much for Listening!
Thanks so much for listening. We love love love reading your kind reviews and we especially loved this one from:
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Being mindful
it was an amazing book. i've been following the podcast since i read the book. it's well written and great wealth of information. exactly what i needed. i started being more mindful of my spending habits and started roth and investing. thank you both for such helpful suggestions.
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