On today’s Business Beat, Jeff talks about the hangover that comes with instant gratification you can’t afford through a buy now pay later (BNPL) plan.
Tune in below to learn why this trend is concerning:
Tune in to News/Talk 760 AM WJR weekday mornings at 7:11 a.m. for the WJR Business Beat. Listeners outside of the Detroit area can listen live HERE.
Are you an entrepreneur with a great story to share? If so, contact us at editor@startupnation.com and we’ll feature you on an upcoming segment of the WJR Business Beat!
Good morning, Paul!
Well, roughly a year ago on the Business Beat, we did a feature about the growing use of what’s called buy now pay later features, or BNPL, on e-commerce sites that is clearly proving effective in driving additional sales for retailers all while providing a buy-on-credit option to consumers who were driven by the need for instant gratification, that is being able to make a purchase even if they can’t pay the full purchase price on checkout.
And while that all sounds good for both sides when it works, when it doesn’t, it’s ugly for consumers. That instant gratification can come with a hangover you don’t want later on, should you not be able to make timely payments as required. If you miss or even worse default on your payment obligations, you’re hit with having to deal with painful interest rates and credit score dings.
And now of growing concerns since the middle of 2021, users of buy now pay later features have been trending toward falling behind on payments for their purchases. Credit Karma research indicates that of the 44% of Americans who have used BNPL, as many as 34% of them have now fallen behind on payments.
So look, if you’re a consumer considering a purchase, especially in these fragile financial times, only make that purchase if you can make sure you can meet the purchase obligations, that is whether you’re paying entirely in cash when you make that purchase, or if you’re using a credit instrument, like a credit card or the BNPL option.
And if you’re a small business wondering whether or not you should provide this option to consumers, you should, but do so only by providing clear information about how the program works and what the consequences are for late or nonpayment.
I’m Jeff Sloan, founder and CEO of startupnation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR.
StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here.
The post WJR Business Beat: A Third of Consumers Buying On Credit Have Fallen Behind (Episode 422) appeared first on StartupNation.
via https://www.AiUpNow.com
June 9, 2022 at 12:04PM by StartupNation, Khareem Sudlow
