Wed: Oy Yey, Maria & You Don't Pay Bribes With Venmo

Buy Now, Pay Later.  And Pay and Pay and Pay Later?

Gracie Williams spends a lot of time thinking about her bills. As the primary earner in a household that includes her ailing mother and younger brother, the South Carolina librarian is constantly weighing how to divvy up her $2,100-a-month take-home pay and late father’s retirement benefits.

After the house and car payments, her mother’s medical bills, filling the gas tank and other expenses, there’s little left for groceries. “It feels like my dollar is being stretched to its absolute limit and it’s still not enough,” she said.

But Williams, 31, has found a way to feed her family: in installments.

She’s using Klarna, a buy now, pay later (BNPL) tool best known for helping people finance Pelotons, laptops and other big-ticket merchandise. Klarna and other BNPL services are increasingly being tapped for groceries — usage surged 40 percent in the first two months of 2023, according to data from Adobe Analytics.

And with inflation still elevated and consumer debt at record highs, industry experts expect more Americans will lean on such services to afford necessities like food and school supplies.

“The consumer is incredibly adept at finding ways to stretch their spending and, healthily or not, BNPL has certainly provided that outlet,” said Simeon Siegel, an analyst with BMO Capital Markets. “It’s not the only way, but I think it has been the easiest way in recent years.”

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Such services have been percolating for years but exploded in popularity early in the coronavirus pandemic, when millions of Americans lost their jobs. Even as the job market and broader economy have recovered, many consumers have continued to lean on payment installment programs, particularly as rapid inflation has made everyday needs like groceries, gas, housing and health care much more expensive. The $309 billion industry is projected to swell more than 25 percent by 2026, according to analytics company GlobalData.

Services like Klarna, Affirm and Afterpay offer cash-strapped consumers “immediate liquidity,” said Marco Di Maggio, a professor of business administration at Harvard Business School who has studied the industry. Households earning $20,001 to 50,000 a year, women, and Black and Hispanic adults are more likely to use BNPL, according to surveys by the Consumer Financial Protection Bureau and the Federal Reserve.

Users also don’t have to pay interest if they meet the payment in four installments. This is what’s appealing to Williams, whose grocery hauls at Walmart have doubled in the past year.

Does Mikey get his marching orders from "mother"?  

Our ship of state is listing a bit, but so far, we've survived.  This country is experiencing a temper tantrum, facilitated as you say by cable news networks, to which I will add by the internet. Facts and laws don't seem to matter, but belief does. 

What makes a bad situation worse is when one political party, the Republicans, abrogate their responsibility to the electorate by focusing on issues that kindle short lived passionate outrage rather than those that will have present and future real impacts on their lives, like future funding shortfalls in entitlement programs such as Social Security and Medicare.

We (the people) has met the enemy and he is us.  We need someone who can articulate a vision of the future; right now he or she ain't in sight.  But how many transformative Presidents have we had since George Washington?  We'll probably muddle through this tantrum too, but there will be some collateral damage, courtesy of SCOTUS.