Risk, returns & timeframes illustration
1 min read
May 18, 2022
by

TikToking into debt

TikTokers flashing off their #gifted haul are sending Gen Z shopaholics into a debt spiral using buy now, pay later (BNPL) schemes. Worst could be yet to come with mortgage brokers treating BNPL overuse as they do drinking and gambling addictions.
1 min read
May 18, 2022
by

TikToking into debt

TikTokers flashing off their #gifted haul are sending Gen Z shopaholics into a debt spiral using buy now, pay later (BNPL) schemes. Worst could be yet to come with mortgage brokers treating BNPL overuse as they do drinking and gambling addictions.
1 min read
May 18, 2022
by

TikToking into debt

TikTokers flashing off their #gifted haul are sending Gen Z shopaholics into a debt spiral using buy now, pay later (BNPL) schemes. Worst could be yet to come with mortgage brokers treating BNPL overuse as they do drinking and gambling addictions.
Table of contents
Getting Started Investing course
Free Getting Started Course
Take your first, or next, step to becoming a confident investor with Hatch's free online course – just 10 minutes a day, for 10 days.

As if viral dances and endless fashion hauls weren’t enough to contend with, TikTok users are increasingly falling into spiralling debt traps. 📉 According to a podcast by NPR’s Planet Money, a potent combination of influencers flashing the latest threads and buy now, pay later (BNPL) schemes has been catching out users. BNPL companies like Affirm (AFRM) and AfterPay, owned by Block (SQ), let customers split their goodies’ purchase price over multiple payments and are often interest free. But buyer beware: there may be traps. 🚫

While millennials look to MTV and genuine, ah-hem, influencers, like Jersey Shore’s DJ Pauly D, for advice on inflation and tanning the man-hood, TikTok gets in front of the very people most inclined to use BNPL: Gen Z. 🤳 Younger people with less ready cash are the largest group of users of BNPL options at checkout, and can be easily tempted by lower up-front prices, which can feel like free money

In New Zealand, more than half of Gen Z Kiwis have used BNPL services over the past three years. A survey by MBIE reported that 87% of buy now, pay later users used it to upgrade their wardrobe. 👟 The bigger concern is that almost 80% said they used BNPL because they ‘can’t afford the full price’. And around 20% of people surveyed miss payments. 

Because the displayed price of one payment can seem so cheap, shoppers like Amelia stack their purchases, which spirals costs higher. 🌪️ WARNING: This can become a big problem for shoppers wanting to borrow money to buy a house, where BNPL is viewed as a sin on par with drinking and gambling. ⚠️
TikTok has tried to play their part to look after users. Last year the company restricted the promotion of financial products, including the promotion of BNPL services. Perhaps brush up on savvy tips from a buy now, pay later shopaholic before you next shop ‘n’ scroll. 📱

We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.

Join the Kiwis who are hatching their tomorrow and have invested more than $1 billion with Hatch.

Explore another series
Tax
Money
Economy
Investing

More recent news articles

Recent learn articles

6 min read
Oct 22, 2024

Cybersecurity in 2024: What you need to know

The world is short 4 million cyber professionals, your strongest password should take 11 billion years to hack, 3,600 emojis could make passwords stronger, and one cyber stock is up more than 500% in 5 years despite grounding flights. Find out how you can fight crime one password at a time in 2024.
Read more
5 min read
Oct 1, 2024

Space Race: 10,000 satellites orbiting Earth just the start

The space race is a big money game. But it seems there are really only two big contenders vying for NASA contracts. Elon Musk’s SpaceX has been leading in what seems like a monopoly. But Kiwi challenger Rocket Lab is nipping at their heels with their largest rocket yet, Neutron, due to hit the skies in 2025.
Read more
4 min read
Sep 11, 2024

In Briefs: Allbirds and On - Sneaker Showdown

Formerly a Silicon Valley staple, has Allbirds strayed too far from its lane in chasing zero carbon? It’s undergoing a stock split and on the brink of delisting, while competition Swiss shoe company On is sprinting ahead with impressive growth and podium finishes.
Read more

Related news articles

More recent learn articles

No items found.

Recent news articles

More recent learn articles

6 min read
Oct 22, 2024

Cybersecurity in 2024: What you need to know

The world is short 4 million cyber professionals, your strongest password should take 11 billion years to hack, 3,600 emojis could make passwords stronger, and one cyber stock is up more than 500% in 5 years despite grounding flights. Find out how you can fight crime one password at a time in 2024.
Read more
5 min read
Oct 1, 2024

Space Race: 10,000 satellites orbiting Earth just the start

The space race is a big money game. But it seems there are really only two big contenders vying for NASA contracts. Elon Musk’s SpaceX has been leading in what seems like a monopoly. But Kiwi challenger Rocket Lab is nipping at their heels with their largest rocket yet, Neutron, due to hit the skies in 2025.
Read more
4 min read
Sep 11, 2024

In Briefs: Allbirds and On - Sneaker Showdown

Formerly a Silicon Valley staple, has Allbirds strayed too far from its lane in chasing zero carbon? It’s undergoing a stock split and on the brink of delisting, while competition Swiss shoe company On is sprinting ahead with impressive growth and podium finishes.
Read more