Buy now, cry later.

Is the buy now, pay later bubble about to burst?

Our Gen Zers have rejected traditional methods of saving up before making a purchase and are in-favour of new-age programs which are riskier than they may seem.

We see a new culture and wave of making purchases and receiving goods now, but paying later or in monthly instalments. Whilst this option may work well for those who can manage their finances and understand on the importance of paying for their purchase on time when the balance is due, our Gen Zers do not have the experience or history of saving hard for something they want and paying for it up front and in full.

In a few short years, payment methods such as Klarna, Clearpay and PayPal pay-in-3 have become the most popular way to pay online, even for items such as groceries and other day to day necessities. Most places you approach such as furniture, kitchen and electrical stores insist that you take advantage of 0% interest by paying over 3 years, enticing people to buy now and pay later rather than to pay up front for their goods.

Social media platforms such as TikTok and Instagram also feature influencers paid by top brands to promote ‘debt free success stories’ glamourising the buy now, pay later idea and the hashtag #afterpay consistently trending with more than 1.6 million posts on the platforms.

With this new ‘instagramable’ and trendy method to get the things you want without working hard to save beforehand, we see our under 25 year olds with the highest default and missed payment rates in history. This behaviour will see our younger generation finding it harder than ever to achieve their financial goals such as buying their first home, affording to start and support a family and being debt-free due to damaged credit scores, a lack of knowledge and this culture of being able to have anything you want, up front, without having to pay a penny for it.

Don’t fall into the buy now, cry later trap.