Buy now, pay later is driving Gen Z into debt

Per moneycontrol:

Australian firm Afterpay Ltd. popularized the concept of buy now, pay later as a new spin on layaway plans with an instant-gratification twist. The financial products typically let consumers pay for purchases in four installments with the promise of little to no fees, no interest and quick credit approvals.

That enticed young consumers with little credit history, who saw BNPL as an alternative to credit cards for the TikTok generation. The pioneering firms, including  Afterpay, Klarna Bank AB and Affirm Holdings Inc., launched with hip clothing retailers, struck brand deals with social media influencers and quickly became ubiquitous on apps and online checkouts. They make most of their money by charging merchants a fee each time a consumer uses the product at checkout.

The short-term loans surged in popularity during the pandemic thanks to consumers who were flush with extra cash and limited to shopping online. Five major BNPL companies originated 180 million loans totaling $24.2 billion in 2021, a near tenfold increase from 2019, according to a report from the Consumer Financial Protection Bureau.