Don’t Touch THIS!! Buy Now, Pay Later: Why You Should AVOID!

Credit card debt in the US recently Surpassed a record $1 trillion this Suggests that the average American is Struggling to keep up with the cost of Living but it only scratches the surface Of just how much debt they're taking on To make ends meet it's believed that People have been racking up billions of Dollars of debt on so-called buy now pay Later schemes and not just in the United States this poses a threat to the Economy and the markets today we're Going to tell you everything you need to Know about this new trend examine Whether it's the Black Swan event that Everyone's been talking about and look At how you can get yourself out of Debt now let's begin by looking at what Buy now pay later actually means in a Nutshell a buy now payat plan also Referred to as a bnpl allows you to make Online purchases by splitting payments Usually while paying 0% interest the Concept of bnpl actually goes quite far Back like way back to the 1840s when Manufacturers would allow people to Purchase things like Furniture farm Equipment and luxury items like posos in Installments in an effort to make their Products more attainable the idea went Mainstream much later with cars when the Consumer had the option to pay for their Shiny new whip in installments although Credit cards were still the preferred

Option however it wasn't until the Pandemic that buy now pay later became So popular as we were all isolated from Civilization and shops remain closed Many people found themselves doing more Online shopping than they had ever done Before the option to break those online Purchases down only made things even Easier I'm sure many of you out there Can probably relate and if you had an Idea of just how many of us were using Buying our pay later during the pandemic Consider this the number of merchants Using a firm one of the largest npl Providers was around 6,000 in 2020 with Around 3 million active users the number Of merchants using a firm in 2022 had Skyrocketed to 235,000 an increase of Almost 40x with an active user count of Almost 14 million people and that's just One entity other bnpl entities include Market leaders like CL as well as clear Pay layby afterpay zip zilch and a Number of startups hoping to grab a Slice of the Pie as a fun fact it's Estimated that one in five people have Used a bmpl service before with the Demographic leaning more towards Millennials and jenzy consumers that's Hardly surprising seeing as the option To buy now and pay later is plasted on The checkout page of so many websites it Also probably won't come as much of a Surprise to hear that a vast majority of

People using a bmpl platform come from Lower income households in fact a Staggering 72.6% of users come from a household Earning less than $75,000 a year not an individual salary A household income by the way if you're Enjoying the video so far smash that Like button to give it a boost subscribe To the channel and ping that Bell icon To catch our next one so what are people Actually using buy now payat for anyways Well it can be any number of things but Generally speaking it's typically those Smaller purchases for example if you Were going to Splash out thousands to go On a family holiday you're more likely To end up using a credit card but if you Then put a basket together of some Questionable Hawaiian print shirts you Might opt for an option to pay that back In a few bite-sized chunks oh and if you Do want to find some clothing that won't Make fellow beach goers want to bleach Out their own eyeballs then you can Check out the coin bu merch store there You'll find some of the coolest crypto Clothing to get you looking fresh to Death in no time the link is Down Below Guys anyway bmpl products have become so Popular that it's not just retail Giants Offering consumers the option bmpl has Also been widely used to pay for some of Life's Essentials such as groceries

Energy bills and even the takeaways you Order on a Friday night while you Netflix and chill the problem here is That it all quickly adds up and because Of the lack of data shared between Different entities you could easily find Yourself in debt with multiple providers At once we'll come back to this lack of Shared data later on but the point is is That even as you start to struggle Paying off One debt you're being Bombarded with offers to take out even More and that's the thing it's not Enough people seem to take into account Debt bmls are a form of consumer credit So when you agree to use bmpl to buy That garden gnome that you have always Dreamed of what you're actually doing is Borrowing money sure it's at 0% interest And sure it's usually just over a Handful of payments but things will only Go well for you until they don't miss a Payment and you'll be slapped with some Crazy fees and your credit score will Take a beating now at this point you may Be asking but Jess if these companies Lend out money at 0% interest how the Heck do they stay in business well Hypothetical viewer I'm glad you've Asked to understand this we can Generalize the basic business structure To consist of three parties at one end There's you the consumer and at the Other end there's the merchant selling

Their products then there's the bnpl Company sitting in the middle now it's The merchant that actually provides These entities with a majority of their Funding that's because a merchant will Pay anything in the region of two to 8% In transaction fees when they make the Sale on the surface this creates a bit Of a win-win situation you get to buy Stuff in a more affordable way and the Merchant gets to sell you the stuff While paying bnpl companies just a small Fee to be fair retailers would also be Charged a fee if you bought this stuff Using a credit card however the other Way bnpl FMS make money is much less Positive and that's by charging Consumers some Hefty fees for defaulting On payments in fact these fees have been Known to be as high as 50% this is where choosing a bnpl Payment option can quickly become a Slippery slope bnpl options are Described to be highly attractive to Those on Lower incomes by giving out the Impression that they can afford a life Of luxury this makes it oh so tempting For people to apply for credit without Really giving much thought to the Potential consequences what makes this Dangerous is the lack of credit checks Involved to be clear it's not a complete Lack but whereas with credit cards we'll Do a full Deep dive into your credit

History to determine if a loan is a good Idea or not buy now pay latest Solutions Only do what's referred to as a soft Credit check for reference a soft credit Check involves checking a few basic bits Of data such as if the borrower has used The platform before and if they're Behind on any payments This skim over the top approach doesn't Stay on your credit history like a Normal credit check does which arguably Makes it even worse I mean it's not such A bad thing if nobody ever knows about It right anyway the point is that more And more people jump on the bmpl Bandwagon the more free Revenue these Entities will earn from merchants and The more chance they'll have of charging Consumers for missing payments given how Popular they've become the money they're Making is nothing short of staggering More specifically the global bnpl market Was valued at around $87 billion in 2020 And saw a 45% increase to around 125 Billion in 2021 in 2022 the industry was Worth just under $180 Billion by 2030 the bmpl market is Expected to be worth over $3.2 trillion Crazy stuff this is why some industry Giants like apple and PayPal have since Jumped on board and it's likely we'll See more Giants start offering bnpl Services before long yeah us residents Can buy the latest iPhone or iPad from

Apple using their new Apple payat Service what's interesting is that Apple Doesn't charge any fees for using their Payat service so it's clearly just a Marketing technique to get as many People holding the iPhone as possible Maybe maybe one day Apple will roll out The pale service to the rest of the World and will all be walking around as Interconnected iPhone Slaves what a time to be alive we Interrupt this program for an emergency Crypto weather forecast get ready for The Whirlwind of savings we're seeing a High pressure sign up bonus system Forming in the Northeast with some Exchanges offering to $60,000 Lush in the South will'll be Seeing some heavy discounts on Hardware Wallets so what out for those if you're Going to be out and about and then over In central areas there's a high chance Of trading fee discounts which should be Seten in later on up to 60% off there Amazing for a more comprehensive Forecast visit the coin buau deals page Using the link in the description these Deals are red hot so make sure to take All necessary Precautions that's all for the forecast Now back to our scheduled program now All of this begs the question of how Much debt has actually been accured the Short answer is nobody knows for sure

However a report from Bloomberg projects That the bmpl will produce a $700 Billion debt pile by 2028 there are several reasons why this Is hard to determine for sure but it all Comes down to one thing a lack of Transparency unlike credit card Providers bmpl providers don't actually Have to report their lending activity to Credit Agencies this creates what's Known as Phantom debt to be fair some Companies will report to credit agencies Off their own bition but even then they Don't have any clear guidelines to Follow that's because of a lack of Regulation in fact most of it comes down To each company to self-regulate not Only will these self-imposed regulations Naturally be as Loose as possible it Also means there's a lack of Standardization each company will have Its own payment structure interest rates And fees this makes it challenging to Assess and compare the data between Different providers as a growing number Of payments are missed and the fees Start to pile up as the cherry on top Bnpl companies can dodge regulatory Bodies because of how they're structured If you've ever used a buy now pay later Option yourself you'll know that you Usually pay around 25% of the cost up Front followed by three 25% installments To cover the rest well this is by design

For reference this structure avoids the Truth in landing act in the US which Explicitly States a need to report debt Involving four or more payments Obviously most bmpl fall just under that Requirement now there are other Global Regulations that bnls managed to avoid In the same way but I imagine that if we Started reeling off all of these Everyone would fall asleep myself Included so for now just know that bpl's Lack of regulatory oversite means that Consumers don't benefit from the Safeguarding they'd have for using other Boring methods like a credit card for Example which are subject to this Oversight now because of this a lot of What happens between the borrower and The lender stays between the borrower And the lender resulting in a whole heap Of that untraceable Phantom debt I Mentioned earlier this Phantom debt can Actually pose a risk to lenders Merchants the bnpl industry and even The Wider economy this is made worse when You compare the explosion in popularity With where we are today recall that bnpl Really took off during the pandemic but That wasn't just because more people Were online shopping the pandemic also Led to record low interest rates meaning That the cost of borrowing money was Next to nothing this was the perfect Catalyst for bnpl companies to really

Take off here's the problem though lower Interest rates means increased levels of Inflation the way that governments Counter this is by raising interest Rates and when interest rates rise Everything gets a whole load more Expensive leading more people inclined To use a bnpl service but few people are Able to repay their debts and if you Default on payments bnpl companies will Not only charge you a hefty fee and turn Your account over to a collections Agency but it also affects your credit Score this inevitably makes it harder to Get credit in the future resulting in Less money slushing around in the wider Credit driven economy funny how the Financial regulations only apply when It's you on the Hook the thing is we don't actually know How much of that sosing is bnpl related Nor do we know how much is being repaid Or is left outstanding this makes it Difficult for economists to determine How things are looking which also Extends to governments as more people Resort to using bmpl and those debts Begin to rack up this will restrict Their ability to spend and because most Developed economies rely on consumer Spending this could bring economic Growth to a grinding halt some would say That we're seeing this play out already And as for how this could affect the

Market bnpl companies carry the Overhanging risk of collapsing if enough Of their clients fail to repay back Their loans given the lack of Transparency of this industry this could Have a KnockOn effect on other areas of The market likewise if people start to Struggle under the burden of bnpl they Could start defaulting on other debts This causing issues elsewhere in fact This is something that's already Happening a recent survey found that 43% Of people using a buy now pay later Service were behind on their payments And 28% said that repaying their Installments meant falling behind on Other debts Yikes this brings us back to the Regulations you know the ones that bnpl Companies have been skillfully avoiding It's clear that buy now payat sectors Are in dire need of proper regulation so Then what is actually being done about It well while there isn't much in place In the moment governments and Regulators Around the world are watching the sector Very closely the associated risks have Caught the attention of regulators in The US the UK and Europe among others These Regulators are working to bring Bmpl firms within their agement to Improve the fairness integrity and Transparency of the bmpl market while Protecting the consumer from taking on

Debt that they can't afford as with any Rapid expanding industry the key to Successful regulation will be the Balance between protecting consumers and Allowing for Innovation to flourish it Should be said that buying our pay later Isn't necessarily a bad thing at all When used in moderation that is Nevertheless there does need to be some Form of action and it looks as though That action may come from the good old United Kingdom that's because the Financial conduct Authority or FCA Published a draft legislation aiming to Regulate bmpl providers as well as Entities providing other forms of Short-term interest free credit or STI FC currently the FCA exempts lending Activity if borrowing is interest free And repayments are made within 12 months Basically the draft changes this Exemption by regulating these debts if They're given out by an entity not Offering the provided goods or services That the agreement finances are give you An example let's say you decided to use Cl to pay for a pair of M Crocs well This would now fall under the fca's Jurisdiction because it wasn't clana That provided these monstrosities it Only helped to finance them the FCA also Introduced a law that prevents bnpl Firms avoiding regulation by including Agreements wherein the lender purchases

Products from the merchant to sell on to The consumer so for example zilch Wouldn't be able to start buying up a Warehouse full of M Crocs from Merchants To then sell onto the consumer on their Own website in order to avoid affecting The wrong businesses and only target Loans the FC are really careful with how They want to introduce this change in Other words so Traders small Partnerships and unincorporated Associations remain unaffected what this Means is that there is now some sort of Regulatory framework that other bodies Can emul ulate within their own Jurisdictions a sort of copy and paste Job if you will if the FCA can get past The draft stage then there is a good Chance that similar laws will be rolled Out elsewhere once this happens the Regulatory landscape will likely Continue to develop to include other Changes that give governments more Oversight on the borrowing and lending Habits of consumers and providers alike Not only will this help protect Consumers from falling into a debt spir But it also gives governments a better Grasp of their own economy consumer Protection good increased government Oversight not so good now a lot of what We've spoken about today involves debt And the struggles that come with it so With that in mind I want to give you

Five simple tips on how you can avoid Debt in order to steer clear of using by Now pay lator options Unnecessarily the first step to avoiding Debt is accepting that most debt is Behavior This applies to any form of debt whether It's buy now pay later credit card debt Or otherwise be honest with yourself are You being rational in your decision- Making or are you taking on this credit To buy something that you don't actually Need a good way to avoid falling into This trap is to ask yourself will I Still want to buy this in say a week's Time the second step to avoiding debt is To create a budgeting tool there are Plenty of apps you can use to make make This process easier some paid and some Free obviously the paid ones will Generally provide you with a better Experience but the free ones will still Do the same job there's actually a free One that anyone can use on Google Sheets And it's called monthly budget it's one Of the first templates you should see When you go to create a new document It's super easy to use and it gives you A breakdown of your finances on the Summary page then you can use the tabs At the bottom to switch to the Transaction action page enter your Income your bills and then add a Category and the summary page will do

The rest top tip for you you can Actually modify these categories to Label your outgoings in a way that's Really suited to you so for example you Can create labels for each outgoing Bills grocery pets even bnpl debt this Gives you a really good overview of any Spending habits that might need some Extra attention anyway once you filled In your budgeting tool you're ready for Step three which is to follow a debt Snowball plan now I know what you're Thinking but no a debt snowball plan Isn't a buildup of more and more debt It's actually a method for you to Concentrate on your own money and Tackle Your debt to do this organize your debts Into a list from largest to smallest Regardless of the interest rates you're Paying then start hammering away at them One at a time from the bottom of the List right up to the top the reason you Don't want to focus on the interest race Is twofold first it allows you to get One debt out of the way ASAP thereby Freeing up more cash to throw at the Second smallest and so on the other Reason is psychological recall that D is More often than not a behavioral thing Having the smallest Deb paid off quicker Gives you your first win which will feel Incredible then you can focus on your Second win which you'll be able to Achieve faster now that you have that

Extra cash to throw at it keep throwing At that debt snowball plan and before You know it you'll be taking out your Biggest loan with all the money that You've managed to build up okay the Fourth step is arguably the most Important and that's to not compare Yourself to others if you see your Friends splashing out at an expensive Restaurant don't feel obligated to join Them it's completely okay to be on your Own path and it's also important for you To keep your end goal in sight stay on Target and stick to the plan there will Be plenty of chances for you to do these Things once you're out of the debt this Ties in to the fifth and the final step Which is to remember your journey this Applies to the phases before during and After your debt-free plan if you feel Tempted to take out unnecessary credit Think back to before and decide if you Want to go down that road again be sure To take note of the victories you Achieved along along the way each Milestone represents a shift in your Mentality your debt total and your Future financial situation all of these Are huge so don't forget to celebrate The wins and when you're finally debt Free remember how far you've come not Only have you learned from the mistakes You made in your younger years but you Now know the effects this can have on

Everyday life keep this in mind next Time you feel tempted to draw on more Credit that's if you even need to at all Because now that your debt free Your money should go a lot Further okay well that is about all for Today's video if you found this video Insightful hit the like button and Subscribe to the channel if you haven't Already don't forget to Ping the Notification Bell and take a few seconds To share the video to help others if You're actively Trad in crypto then you Have to check out the coin Bureau deals Page where you'll find trading fee Discounts of up to 60% and sign up Bonuses of up to $60,000 as well discounts on some of the Best hardware wallets out there the link To that is in the description okay thank You so much for watching and I'll see You all in the next one this is Jessica Over and out [Music]


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