Companies like Affirm, Klarna, and Afterpay are what are known as Buy Now Pay Later companies (BNPL). These companies allow you to purchase items, usually online or through apps, and pay later. That sounds like a good alternative, and a better option than using traditional charge or credit cards….right?
Well, it depends. Most households would save hundreds, if not thousands, of dollars each year by avoiding high-interest loans and credit cards and sticking with cash or debit cards (or low-interest loans). And while some of these companies have attractive early offers (like introductory rates on credit cards), there are issues when consumers default on the “pay later” part of the agreement. We’re certainly seeing more consumer bankruptcy filings listing some of these parties as creditors.
Part of the problem is that these companies are new, and new companies aren’t subject to the same laws as traditional loan and credit card companies. Like cryptocurrency, the law hasn’t caught up to these companies yet and watchdogs like the Consumer Financial Protection Bureau are just starting to get a lay of the land and understand the issues that these companies pose to consumers.
Remember, these companies are looking to make money for their investors, and the best way to make money is to get a large market share and charge fees. As the Latin saying goes, caveat emptor or buyer beware.
If you are struggling with payments for Buy Now Pay Later debt, i.e. BNPC, or have other financial concerns, please call our W M Law office at 913-422-0909 to schedule a free initial consultation with one of our attorneys and discuss your options; or go to our website: www.kansascitybankruptcy.com. At WM Law, we are here to help!