An Unpleasant Surprise at the Grocery and a Bad Bank Acting Bad
A week of consumer finance news
While some surprises can be welcome, the type of surprise that leaves you with a negative mark on your credit report and an overdraft fee in your bank account is not one of them.
However, more and more consumers are using short-term, installment loans to pay for basics like groceries.
While this may provide the ability to stretch dollars further in difficult times, there are also problems with frequent use of Buy Now, Pay Later products:
In fact, U.S. PIRG offers a warning on BNPL:
However, BNPL products do not underwrite for a consumer’s ability to repay, can rely on the expectation of late fees, can be difficult to manage, and can trigger punitive overdraft or non-sufficient fund fees if linked to a bank account. Further, these products can lead consumers into taking on unmanageable amounts of debt and lack the same dispute or refund rights that credit cards have should a consumer be unsatisfied with their purchase.
