Yin on Risks of ‘Buy Now, Pay Later’ Plans
Wesley Yin, associate professor of public policy and economics, spoke to USA Today about the rapid growth in “buy now, pay later” credit, which has come under the scrutiny of the Consumer Financial Protection Bureau. The loans are especially appealing to young shoppers and people with low income or poor credit, and the federal agency found that borrowers may be unaware of late fees and other consumer risks. Yin drew a parallel to the easy credit of the pre-2008 mortgage industry, which helped trigger the Great Recession, but said the macroeconomic implications of the “buy now, pay later” programs are less worrisome. He noted that the growing popularity of this form of credit may be a symptom of a deeper problem in the economy. “Is it a luxury to want an iPhone, or is it a luxury to want a new sofa?” he said. “The fact that people can’t pay for it, I think, is the issue.”
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