Beware of the Pay-Later Trap: Americans Accumulating Dangerous ‘Phantom Debt’

“Buy Now, Pay Later” loans are helping to fuel a record-setting holiday shopping season. Economists worry they could also be masking hidden financial risks for Americans. These loans, which allow paying in installments, have become popular due to high prices and interest rates. Retailers use them to attract customers, but some think they encourage excessive spending in young and low-income groups. These loans aren’t captured in public data and could pose a risk to the financial system if unregulated. Although consumer credit measures indicate financial health, it may not capture the fastest-growing pay-later market. Credit card borrowing is at a record high but stress is especially evident among younger adults. These financial difficulties have been encouraged by the recent surge of “Buy Now, Pay Later” services. These services are similar to older layaway programs and are popular among younger Americans. People often get into debt and overspend, especially during the holiday season, leading to further financial complications. Pay-later services expect shorter loans and assess borrower capability, making it easier to accrue debt. Klarna, one popular such loaning service, acknowledges that users could misuse their loans and that the company takes measures to restrict such use. As the use of pay-later loans increases, so does the risk of overdrawn bank accounts. Financial advisers are noticing more low-income clients use these loans. While these services could be important for communities without access to traditional loans, proper regulation is needed to prevent the misuse of pay-later options.

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The Media Industry’s ongoing struggle to stay relevant in a digital age

The career of Roger Fidler exemplifies a warning: Sometimes, you can predict the future but still fall victim to it. Three decades ago, Mr. Fidler was a media executive promoting a vision of the future for newspapers. The rise of digital technology would allow for news to be accessed on portable devices all day long, […]

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The Continuous Decline of the Media Industry: A Losing Battle against the Future

Roger Fidler has had a front-row seat to the digital revolution in the newspaper industry. Thirty years ago, he was advocating for the future of newspapers as portable digital devices that would offer multimedia content to readers. While his vision has largely come to fruition with people constantly online and engaged with news, traditional media […]

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Biden Takes Action to Limit Sale of Personal Data to China and Russia

President Biden will issue an executive order to restrict the sale of American data to China, Russia, and four other countries in an effort to protect sensitive information from being used for malicious purposes. The order aims to prevent personally identifying data, such as locations, health records, and genetics, from being obtained by these countries […]

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