312: Buy Now, Pay Later: Consumer Convenience or Predatory Pricing Scheme?

BiggerPockets Money Podcast

BiggerPockets

Education, Investing, Business

4.5 • 3K Ratings

🗓️ 24 June 2022

⏱️ 49 minutes

🔗️ Recording | iTunes | RSS

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Summary

“Buy now, pay later” companies have been around for decades, but not in the form they take today. You may have noticed that when you check out from an online store, a little prompt asks you if you want to purchase your goods for just “four easy payments of…” It seems like a good deal, doesn’t it? You can buy the same goods, for less, today, with no interest payments! Before you add those shoes to your cart, think twice before selecting the “buy now, pay later” option. Alexi Horowitz-Ghazi, NPR reporter and host of Planet Money, was interested in how this type of interest-free internet shopping is affecting consumers. Through his research, he found numerous examples of online shoppers overspending, getting into debt, and not knowing their total purchase price. The ease of paying just a fourth of a product’s price and getting it delivered in days became too much for many consumers to resist. And now, they’re paying the price. If you don’t want to fall prey to this type of split-up pricing, you’ll want to hear what Alexi, David, and Mindy have to say. Using this type of “interest-free” credit could put your financial freedom in jeopardy—and no one wants to trade early retirement for a new swimsuit. In This Episode We Cover The “buy now, pay later” programs and how they target online shoppers How buying now and paying later could affect your credit score in the long run What happens when shoppers can’t pay their future installment loans? Why US legislators are taking “buy now, pay later” companies to court The marketing tactics used by these companies to get you to spend more at checkout Why saving now and buying later will help your future finances And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Mindy's Twitter Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Subscribe to The “On The Market” YouTube Channel Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets Check Out Mindy’s 2022 Live Spending Tracker and Budget Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome to the Bigger Pockets Money Podcast, show number 312 Finance Friday edition,
0:05.2	where we talk to Alexi Horowitz-Gazi about the Buy Now Pay Later program.
0:10.0	In the early years of credit cards that led to problems with over consumption and spending,
0:15.1	problems with fraud, that then led to kind of the regulatory framework that we now,
0:19.5	that now is just kind of normal to us. And so this feels like a new type of consumer technology
0:25.2	that's also started with individual businesses targeting individual demographics and is now
0:30.0	expanding. And now the traditional financial institutions are like, all right, we're going to
0:33.7	start offering versions of this to compete, but there hasn't been a kind of full regulatory
0:39.8	reckoning. So we're still in that leading edge moment of a new, of kind of new technology.
0:44.4	Hello, hello, hello, my name is Mindy Jensen and joining me today is my military millionaire
0:49.2	co-host David Paray. What's it? I know, I'm supposed to say something super profound.
0:56.1	That's okay, you don't have to. The sky is blue because
1:00.4	science. Wow, that's not why sky is blue at all. David and I are here to make financial
1:05.9	independence less scary, less just for somebody else to introduce you to every money story,
1:11.9	even the ones that I don't love, because we truly believe financial freedom is attainable for
1:16.6	everyone no matter when or where you're starting. Yeah, whether you want to retire early and
1:20.4	travel the world or go on to make big time investments and assets like real estate or start
1:24.3	your own business will help you reach your financial goals and get money out of the way so that you
1:28.6	can launch yourself towards your dreams. David, today we are speaking to Alexi Horowitz-Gazi from
1:34.6	the NPR podcast Planet Money. He recently released an episode about the Buy Now Pay Later program,
1:42.8	which is also called the Point of Sale Loan program. And holy canole, I'm going to give you a
1:50.4	spoiler right now. I don't like this program and I want to talk to Alexi about it because
	...

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