Jess Riley has been documenting her journey of paying off debt on TikTok. Social media micro-trends can lead to excessive online shopping, especially with the availability of buy-now-pay-later services. These services, like Klarna and Affirm, may make purchases seem more affordable upfront, but the accumulated payments can create a challenging cycle of debt. Many young people feel trapped by these services, as they try to keep up with influencer trends.
For 31-year-old content creator Jess Riley, the allure of buy-now-pay-later combined with micro-fashion trends nearly caused financial distress. She admitted to being influenced by online content and making impulsive purchases, often forgetting what she bought shortly after. Riley’s experience reflects a common theme among consumers who find themselves enticed by the ease of BNPL services, leading to overspending and mounting debt.
Experts warn that the lack of regulation around buy-now-pay-later apps can result in individuals accumulating debts without proper assessments of affordability. Late fees and interest charges can further exacerbate financial difficulties for those who struggle to make repayments. While efforts to regulate BNPL providers are underway in some countries, the temptation to overspend on online purchases remains prevalent, fueled by social media and influencer culture.
The illusion of affordability perpetuated by buy-now-pay-later services can deceive consumers into believing they can afford purchases when, in reality, they may not have the means to do so. The rising popularity of BNPL loans in the US highlights the growing trend of using these services for holiday shopping and beyond. Social media influencers and algorithms contribute to the pressure to make purchases, often leading individuals to opt for BNPL options to keep up with trends.
Individuals like Toni-Ann and Beth Fuller have shared their stories of managing debt and curbing unnecessary spending on platforms like TikTok. By being mindful of their financial habits and reducing impulse purchases, they have made progress in paying off debt and regaining control of their finances. As the allure of online shopping and influencer culture continues to impact consumer behavior, it is crucial for individuals to exercise financial discipline and avoid falling into the trap of excessive debt accumulation.
Once she had made a purchase, her mind would quickly shift to the next item. “Things were becoming outdated so rapidly,” she expressed. “I kept thinking, surely I don’t need more things. Yet, when an event approached, I felt out of touch with the trends, even though I had bought new clothes just the month before.”
Addressing the Habit
According to Williams, people generally dislike delaying their purchases, making the allure of Buy Now, Pay Later (BNPL) services strong. Breaking down payments over time also lessens the financial strain. “Our brain’s pain receptors are more responsive to larger expenses,” she explained. “Psychologically, it feels more manageable to pay in smaller increments rather than a single lump sum.”
Williams advised individuals to evaluate whether a purchase is a necessity or a desire and suggested saving up to buy it outright. “Focus on halting the cycle by refraining from using these services.”
A representative from Klarna stated that the company provides a “fairer and more sustainable” option compared to conventional credit practices. They emphasized stringent eligibility evaluations for each transaction using real-time data, periodic review of lending standards and spending limits to cater only to financially capable borrowers, and imposing restrictions on service usage after missed payments to prevent debt escalation.
In contrast, an Afterpay spokesperson clarified that the company refrains from conducting hard credit checks or reporting account activities to credit agencies. They mentioned capping late fees at 25% of the order value and offering small initial spending limits to customers. The spokesperson highlighted that the vast majority, 95%, of installments were paid punctually in the third quarter of 2024, with 98% incurring no late fees.
Navigating Financial Struggles
An Affirm representative assured that the service imposes no late penalties or undisclosed fees and restricts further use for customers failing to repay their loans. However, influencers interviewed by BI noted that BNPL services facilitated their shopping habits. Toni-Ann shared her ongoing journey to clear her debt, acknowledging the difficulty but emphasizing the importance of altering spending behaviors.
When interviewed last year, Riley had only $800 left to pay off and anticipated becoming debt-free shortly. Despite some relapses using BNPL, she focused on changing her spending mindset, steering clear of fleeting trends promoted by influencers. Riley recognized progress as a long-term endeavor rather than a quick fix.
