Th Atlantic has a piece that tiktokkers should pay attention to.

Apparently “influencers “ are using terms such as “Ima Afterpay that s%#@,” says “the creator behind All Things Naisa on TikTok.”

The logic flows through, Banks are bad, credit cards are bad and interest is really bad. So a zero % after pay, klarna etc sounds really good in this storyline.

Relevance to Bankwatch

And it is a fictional story. The interest is baked into the price of course, as it always is with zero %. But that story is lost on enough under 30’s to provide growth until the delinquency’s creep in, and they will.

Those BNPL aficionados will see credit scores drop rapidly as bureaus layer on higher negative differentials for BNPL credit.

… #BNPL #consumercredit

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The Atlantic

Some snippets …

Many Gen Zers have rejected traditional credit in favor of new-age layaway programs, which are riskier than they may seem.

What companies like Klarna once characterized as paradigm-busting behavior—young people rejecting stodgy banks in favor of more freeing forms of finance—now looks like the crest of yet another credit cycle, a familiar note in the motif of American consumption. As with young credit-card holders, BNPL users under 25 have the highest default and delinquency rates. If credit dries up in a broader downturn, they are at risk of losing access even to those programs. Meanwhile, they may find that their reliance on these parallel lending methods, which only glancingly intersect with the conventional credit ecosystem, has hobbled their credit history at the worst possible time.