This doesn't look like a good sign...
A third of U.S. consumers who used "buy now, pay later" services have fallen behind on one or more payments, and 72% of those said their credit score declined, a new study published by personal finance company Credit Karma showed.
I was just reading how a few others were getting into/looking at this Buy Now Pay Later model. I posted another article about Amazon getting into this...
I don't know if it's like this in other areas of the US but in Oregon, it seems like no one wants to work anymore. Many who interview don't want to commute, they want to work from home and make more than when they commuted before the pandemic. I find it interesting that with these factors in place, people are surprised they are having financial difficulties.
I started helping my best female friend with her finances recently. Originally I just wanted to get her on better credit cards, and share what I'd learnt here... but then I saw the hot mess her husband had made out of their finances.
"Special Financing" is a dirty dirty term. Her husband never met a store card he didn't like, and clearly cards that give him deferred interest (and then hit him with 29.99% interest all at once when the 0% window runs out) don't register properly in his brain.
She and I were getting those under control when I discovered that he has almost 40 micro-loans from Affirm and Bread combined. They range from $5-$35 a month in payments. Thankfully he hasn't defaulted on any of them... yet (he had a bankruptcy right before they got together). She confronted him about their existence, and he claimed that it "wasn't that many" and that it was "under control". He's funding them from a second bank account he has set up with GoBank that he uses for his side-hustle of Uber/Lyft driving... which is supposed to be paying for the student loans he's allowed to double over the years (he currently owes 48k... the original loans totaled 22k). Needless to say, he's not paying the student loans at all from that account. Instead he's got hundreds and hundreds now cycling through these micro-loans every month, and more daily as he clearly feels that adding $10 more here and there is "nothing".
She was almost ready to divorce him on the spot (not exaggerating, this is the third time, and she started thinking about lawyers), or at least legally separate their finances... but she's concerned if she does he'd actually be worse (throw away more money on buying stuff then just go bankrupt again to clear the slate, while not helping pay for the mortgage or bills anymore). As is, she's taken out 50k in personal loans over the past 10 years to consolidate the things he's run up in the past.
And guess what? None of this is hurting his credit score. Because none of these micro-loans are showing on his reports. It's hurting HER more that she's had to carry balances on regular credit cards because they're short funds to pay them off (mostly helped her fix that with balance transfers and a few good product changes, as well as soft pull CLI on as many cards as we could to lower utilization).
It's a hot mess. Why doesn't that stuff show on the credit report? He's irresponsible as hell, and shouldn't be allowed access to financing anything, ever. But they're letting him rack it up like crazy. 🤦♀️😡