A financial crisis may be brewing with buy now, pay later, users, a new survey shows.
Not only do shoppers who use short-term financing tend to borrow and spend a lot, but they’re having difficulty keeping up with debt payments, according to a survey of 2,223 U.S. adults between Aug. 31 and Sept. 3 by business intelligence firm Morning Consult.
More than 2 out of 5 users carry buy now, pay later debt and one-quarter of them missed a payment last month, the survey showed. Another one-quarter said they paid late fees; 27% saw a decline in their credit score and 22% interacted with a debt collector.
“If their personal debt situation worsens, these figures could rise, creating real problems for these users at a time when interest rates are already high,” said Morning Consult financial services analyst Jaime Toplin.
Who are buy now, pay later users?
Here’s what Morning Consult found:
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◾ Young: Thirty-seven percent of Gen Z adults and 32% of millennials said they made a buy now, pay later purchase in August, compared with 16% of Gen Xers and 6% of boomers, Morning Consult said.
◾ Well-off: More than one-fifth (21%) of consumers in households earning between $50,000 and $99,999 annually used buy now, pay later last month, and 28% of those earning at least $100,000 did so. The wealthier you are, the more often you use them too.
◾ Tech savvy: They have less access to or are unsatisfied with traditional financial institutions but…
