Why pay for something now when you can pay for it later? No, we're not talking about that special five-finger discount you pay for later from jail. 👋⛓️ We're talking about "buy now, pay later" (BNPL) apps.
BNPL apps like Klarna and Afterpay have taken the nation by storm. 💸🛒 Americans use these services to pay for everything from vacations to groceries and everything in between. However, it's the kids who seem to be using it the most.
Can we call 20-30 year olds kids? Are we really getting old? Should we start using a night serum? 😶🌫️
Here’s Five Fast Facts on young people and BNPL programs:
- 💵 Serenity Now, Pay Later - According to recent data, adults aged 35 and younger make up 53% of the peeps who use BNPL apps. This demographic only makes up 35% of credit card holders. What's the draw? Many people like that they can break up purchases into installments versus charging it the old way.
- 🎨 Down to an Art - What do Millennials and Gen-Z buy the most with BNPL services? "Arts, travel, and entertainment," followed by purchases in the "home and garden" and "hardware" categories. Clothing and accessories was number one in 2021 and 2022, but it's now fourth place.
- ✈️ Around the World - Need some help footing the bill for your next vacation? Join the club. According to Afterpay, use of the app to pay for travel tickets increased by a crazy 1,430% in one year among its youngest customers.
- 🗑️ Trashy or Classy? - Young adults aren't just paying for vacations and lawnmowers with BNPL. They're using it to pay for everyday items and household staples, too. The use of BNPL services on contact lenses jumped a whopping 465% between 2022 and 2023. Even garbage bags saw a crazy jump of 182%.
- 🥬 Throw It in the Bag - While the younger generations seem to use BNPL the most, these apps are gaining popularity across all generations, especially in the essentials category. Since this time last year, BNPL use for grocery purchases by consumers of all ages increased by 40%.
🔥Bottom line: Remember: although many BNPL apps let you pay off purchases interest-free in installments, there are still risks. If you miss a scheduled payment or fail to pay off the purchase in the agreed upon timeframe, you could get hit with fees and penalties. Just like a credit card, these can rack up quickly and impact your credit score. Shop smart out there!
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