Financial literacy class: More US holiday shoppers turn to ‘buy now, pay later’ loans

This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.

Read below a selection of FT articles picked by financial literacy teachers with classroom questions/discussion points, mapped by theme. View the full selection here.

Also explore the classroom resources produced by the FT’s Financial Literacy and Inclusion Campaign charity.

Specification:

• Consumer Skills

Summary

The article highlights the increasing popularity of Buy Now, Pay Later (BNPL) options for holiday shopping last year. With prices rising and savings falling, many consumers chose BNPL to manage immediate costs by spreading payments over time.

Although it provides flexibility, experts warn that frequent use of BNPL can lead to debt accumulation. Some BNPL companies now offer interest-bearing loans, adding costs for consumers. Advocacy groups worry that lack of reporting requirements for BNPL loans makes it easier for consumers to accumulate debt without realising it.

Click to read the article and then answer the questions:

More US holiday shoppers turn to ‘buy now, pay later’ loans

Questions

• Why do you think more people chose Buy Now, Pay Later options for holiday shopping?

• What are some risks of using BNPL too often for purchases?

• What are some ways people can avoid debt while still making purchases they want or need?

• Have you ever used or thought about using BNPL? How would you decide if it’s a good choice?

Tim Ranzetta, Next Gen Personal Finance