Consumers in the US using the “buy now, pay later” model. borrow more often for other types of credit, which causes them more financial stress.
A recent study by the Consumer Financial Protection Bureau (CFPB) in the United States found that this group of consumers use other types of creditincreasing its debt through more than one credit channel.
The data in the report shows that 62% of people using the buy now, pay later model they also have retail credit card debtcompared to 44% of consumers who do not use it.
But not only that, more than 30% of people who use the principle of “buy now, pay later” You also have personal and student loan debt.while nonusers were not dependent on this type of credit.
Who uses the “buy now, pay later” model
The report also provides demographics of shoppers who use the buy-now-pay-later model.
According to published information, most users minority or low income familieswith a pronounced tendency to use financial instruments with a high interest rate.
Information from a survey conducted in 2022 showed that the majority of users of the “buy now, pay later” model African American, Hispanic, or female-headed familieswith income between $20,000 and $50,000.
Using “buy now, pay later” it is also more common among tenantswith a frequency of 22%, while the owners use it in 15%, according to the study.
In addition to using the “buy now, pay later” model, these consumers also tend to use payday loans, pawnshops and, of course, late payments and overdrafts.
According to the report, these families are much more vulnerable take on more debt due to late payments and collection fees.
In this regard, CFPB director Rohit Chopra indicated in a statement that while it may not seem true, these families may have access to other less expensive financial instruments this could ease the stress of falling into arrears.
According to a CFPB study, users of the “buy now, pay later” model are more than twice as likely to have credit card arrears for at least a month what they have
Source: La Opinion
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