Millennial, Gen Z consumers turning to BNPL services as costs rise: survey
BNPL provider Millennials, Gen Z, ability to make luxury purchases
Younger generations are increasingly using BNPL amid rising inflation. (iStock)
Millennial and Gen Z consumers are more willing to utilize buy now, pay later (BNPL) services to help cope with the growing costs of goods, according to a new survey from Trustpilot.
Inflation grew 8.3% in April, cooling for the first time in months, yet rising more than anticipated. Trustpilot's survey found that more than half of respondents (51%) said that a fear of taking on too much debt amid rising levels of inflation is preventing them from using a BNPL service.
However, 41% of those between the ages of 18 and 34 said they'd likely use BNPL services for household purchases. That's compared to just 12% of older Americans, aged 55 and up, who said they'd be willing to do the same.
"Of the group that has used BNPL, 25% are already planning to use the service to help pay for household essentials that have risen in cost as a result of inflation," the survey stated.
If you're struggling with rising costs as a result of inflation, you could consider taking out a personal loan to help pay down any debt you might have. Visit Credible to find your personalized interest rate without affecting your credit score.
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Younger generation taking more risks with BNPL, Trustpilot says
BNPL providers — including popular providers like Affirm, Klarna and Paypal — partner with retailers to allow shoppers to split the cost of their online purchases into multiple installments at checkout. These interest-free payments are then generally due within a few weeks after the time of purchase. Missed payments, though, can result in late fees and other penalties.
Trustpilot’s survey shows that younger generations are more likely use these BNPL options despite potential pitfalls, like fraud. Specifically, research from fraud prevention company Callsign found that 14% of consumers surveyed have fallen victim to fraud by way of BNPL — this occurred by signing up for fake accounts accidentally, getting hacked and not changing an account password.
When it comes to both luxury and essential purchases, those of younger ages are more likely to take advantage of BNPL to afford them. The survey found that 45% of consumers between the ages of 18 and 34 were likely to use such services for basic essentials, and 54% would for luxury items. For those between the ages of 34 and 54, those results were 33% and 38%, respectively. Finally, for people aged 55 and up, the results were 16% and 24%.
"Even with financial burdens and responsibilities piling up, the younger generation still wants to claim its own slice of luxury," the survey read.
If you are worried about accumulating debt, consider taking out a personal loan to pay down high-interest debt. Visit Credible to compare multiple mortgage lenders at once and choose the one with the best interest rate for you.
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Americans aren't expecting relief from inflation anytime soon: Datassential survey
More Americans say that they're seeing the impact of rising inflation, and a recent survey showed that nearly all respondents felt that way.
According to market research company Datassential, 96% of people surveyed said they’re noticing the signs of higher prices in the U.S. economy as of March 2022. That's an increase from 82% of consumers who said the same during the spring of 2021. Now, the Federal Reserve is actively raising interest rates in order to combat inflation, announcing a 50-basis point rate hike at its May meeting.
"With inflation running at the highest pace in 40+ years, putting it at a lifetime high for most Millennials and younger generations, the Fed voted to raise the Fed Funds rate by 50 basis points," Realtor.com Chief Economist Danielle Hale said when the increase was announced. "This hike was widely expected following the Fed’s March meeting and intermeeting discussions."
If you want to take advantage of interest rates before they increase further, you might consider taking out a personal loan to help pay down high-interest debt. Contact Credible to speak to a loan expert and get all of your questions answered.
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