13 ms·
It Ruined Everything’: Buy Now, Pay Later Drives Gen Z into Debt
- slang800 4y agohttps://archive.ph/apaCq https://archive.ph/apaCq
- funstuff007 4y agoProbably a good time to take on more debt. Even though interest rates are higher, the inflation will help you pay any new debt down quite quickly.
- brailsafe 4y agoWouldn't the opposite be true?
- spicyusername 4y agoOne thing I see that gets left out of this advice is that only works if you get a pay raise. The whole idea that inflation eats into future debt assumes that your pay inflates alongside your expenses. Inflation doesn't magically make debt cheaper, your rising salary does.
- cmrdporcupine 4y agoAlso some of the assets you buy with your debt (say, a house) are also potentially losing value with inflation (and higher rates) in the mix.
- funstuff007 4y agobut if you buy canned goods, and finance with negative interest rate debt, that's a winner.
- Ralfp 4y agoThats only if your earnings will also grow, keeping you ahead of the curve of growing interest rates, which will not be the case for great majority of workers. I have a mortage in Poland. Base rates went from 1.5% to 6.75%. My mortage’s monthly payment went from 1792PLN to 3200 PLN (~715 USD), where 3000 PLN is interest. This is not big enough to bankrupt me, but 1000 PLN is a lot of money here and a lot of people feel the pressure so our govt enacted law that lets you move four rates in a year to the end of mortage for two years, effectively extending the mortage by 8 months, but at no base cost of mortage changing.
- pengaru 4y ago> I have a mortage in Poland. Base rates went from 1.5% to 6.75%. My mortage’s monthly payment went from 1792PLN to 3200 PLN (~715 USD), where 3000 PLN is interest. Are fixed-rate mortgages not the norm in Poland?
- gimmeThaBeet 4y agoMy understanding was that long-term fixed rate mortgages were not common at all outside of the US and like France. This is from 2010 but has some good charts. https://business.sdsu.edu/_resources/files/real-estate/research/10122_research_riha_lea_report.pdf https://business.sdsu.edu/_resources/files/real-estate/resea... Anecdotally it meshes with some things I've heard elsewhere but don't hold me to it: - Canadian mortgages are typically something like 5 years. - UK is similar, it's either variable, or fixed for something super short, like 2-3 years. - Australia same kind of boat, most are variable, I've heard the interest rates during covid temporarily reversed the trend, but same deal, they're only fixed for a few years.
- pengaru 4y agoThat's kind of wild, even in my teens (1990s in Illinois) it seemed to be common knowledge that variable APR mortgages were a risky/Bad Idea. I had no idea they were the norm elsewhere. The cynic in me would have assumed the US led the world in predatory style lending. This country loves handing people more than enough rope to hang themselves with, while depriving them of any relevant education beforehand.
- candiddevmike 4y agoAre you sure? Inflation is slowing but your interest rate will remain the same. You run the risk or being laid off, and you most likely not going to see any huge inflation adjusted salary increases anytime soon.
- ryanSrich 4y agoThis doesn’t make sense. Wages are decreasing. Companies are using inflation and recession fears to not just stagnate wages, but actually lower them. Public and private sectors are doing massive layoffs. No. This is a bad idea.
- ThunderSizzle 4y agoSpending money you don't have is being financially irresponsible, regardless of whether it's through credit cards or some other equivalent. However, the financially irresponsible tend to blame the tool (eg credit cards) rather than becoming more responsible, and, in the case of this article, Gen Z seemed to have fallen prey to a similar tool but with a newer name.
- 7e 4y agoAh yes. “Guns don’t kill people, people do.” This ignores the morality of predatory behavior and enablement.
- ekianjo 4y agoindividual agency is still a thing no matter what.
- schlauerfox 4y agothen why do they spend so much on advertising. You're being reductive and enabling.
- ekianjo 4y agoAdvertising only works on a minority of people who are naive. The other goal of advertising is to generate awareness. The more you teach people about the influence of ads the more agency they gain.
- Bilal_io 4y agoPrecisely, I only have and use a credit card to maintain my credit score. I don't max i as I don't spend more than two-figure to keep it active then I pay it within 3 days. The system is designed to obligate people to use credit, and I can see how tempting and easy it is for someone that lives paycheck to paycheck to use their credit card and carry balance. Edit: I wanted to add. News websites have a habit of blaming gen z for all the different issues but forget to blame the system. Gen z is poorer than previous generations, and that should be highlighted everytime they're blamed
- mc32 4y agoWe need to instill financial literacy in high school. Make home ec a mandatory class. Don't graduate without passing.
- nopenopenopeno 4y agoWhose interests would that serve?
- mc32 4y agoDefinitely NOT the credit card companies who prey on unwitting and financially unsophisticated young earners.
- nopenopenopeno 4y agoIn that case, good luck implementing it short of a wholesale political revolution.
- MikeMacMan 4y agothe students
- Bilal_io 4y agoI think it was a rhetorical question. It won't be added to the curriculum since it hurts the big financial institutions
- nopenopenopeno 4y agoYeah. The problem is a political conflict, not lack of awareness or ideas.
- noobermin 4y agoWhy home ec? What does that have to do with the article?
- recursivedoubts 4y agoas surely as water will wet us as surely as fire will burn the gods of the copybook headings with terror and slaughter return usury destroys societies
- quotemstr 4y agoKipling is fantastic. Read the whole poem: https://www.kiplingsociety.co.uk/poem/poems_copybook.htm https://www.kiplingsociety.co.uk/poem/poems_copybook.htm As I pass through my incarnations in every age and race, I make my proper prostrations to the Gods of the Market Place. Peering through reverent fingers I watch them flourish and fall, And the Gods of the Copybook Headings, I notice, outlast them all. We were living in trees when they met us. They showed us each in turn That Water would certainly wet us, as Fire would certainly burn: But we found them lacking in Uplift, Vision and Breadth of Mind, So we left them to teach the Gorillas while we followed the March of Mankind. We moved as the Spirit listed. They never altered their pace, Being neither cloud nor wind-borne like the Gods of the Market Place, But they always caught up with our progress, and presently word would come That a tribe had been wiped off its icefield, or the lights had gone out in Rome. With the Hopes that our World is built on they were utterly out of touch, They denied that the Moon was Stilton; they denied she was even Dutch; They denied that Wishes were Horses; they denied that a Pig had Wings; So we worshipped the Gods of the Market Who promised these beautiful things. When the Cambrian measures were forming, They promised perpetual peace. They swore, if we gave them our weapons, that the wars of the tribes would cease. But when we disarmed They sold us and delivered us bound to our foe, And the Gods of the Copybook Headings said: "Stick to the Devil you know." On the first Feminian Sandstones we were promised the Fuller Life (Which started by loving our neighbour and ended by loving his wife) Till our women had no more children and the men lost reason and faith, And the Gods of the Copybook Headings said: "The Wages of Sin is Death." In the Carboniferous Epoch we were promised abundance for all, By robbing selected Peter to pay for collective Paul; But, though we had plenty of money, there was nothing our money could buy, And the Gods of the Copybook Headings said: "If you don't work you die." Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew And the hearts of the meanest were humbled and began to believe it was true That All is not Gold that Glitters, and Two and Two make Four And the Gods of the Copybook Headings limped up to explain it once more. As it will be in the future, it was at the birth of Man There are only four things certain since Social Progress began. That the Dog returns to his Vomit and the Sow returns to her Mire, And the burnt Fool's bandaged finger goes wabbling back to the Fire; And that after this is accomplished, and the brave new world begins When all men are paid for existing and no man must pay for his sins, As surely as Water will wet us, as surely as Fire will burn, The Gods of the Copybook Headings with terror and slaughter return!
- UncleOxidant 4y agoIt's not like Gen Z is the only generation this has happened to. The Boomers ran up a lot of debt as well.
- donutshop 4y agoWho can say no to free money? /s
- RustLove 4y agoWhy should they worry? Some future President or Congress will just make people who were responsible pay their debt for them. That's what we've taught them, after all.
- gjsman-1000 4y agoRight - we did it with student loans (even if it is in legal limbo). It’ll start with $10K for school loans, then $10K for your credit card debt, and then…
- RustLove 4y agoAnd debt was forgiven done before with mortgage payments in 2008 (even if people lied on their mortgage applications, or took out HELOCs on the mortgage!) and on taxes owed on stock option speculation during the dot-com crash of 2000.
- gjsman-1000 4y agoAnd you don’t even have to be a person! Bankrupt car companies? Send them checks! Incompetent banks? Send them checks! Incompetent schools? Send them grants! Incompetent government agencies? More cash (1)! This can’t last… it’s a pyramid scheme that assumed the authority to shut down competing pyramid schemes. (1) My home state of Minnesota spent over $100 million and over a decade of time to build a driver’s license system. Total sunk-cost. The rollout was so bad they scrapped it for a third party platform. Look up MNLARS for the gory details of absolute technical failure.
- xracy 4y agoI like how strong a causal link you have that people have taken anything away from the gov't paying off some of their debt. I think large banks are much more likely to take that message away than individual borrowers...
- perfecthjrjth 4y agocredit card = buying things that are not needed with the money you don't have
- pfortuny 4y agoFunnily enough, “economics” used to mean exactly that: hoysehold management. It got somehow lost in translation.