Tech billionaire Elon Musk recently called for the elimination of the Consumer Financial Protection Bureau (CFPB), the federal agency that oversees buy-now-pay-later (BNPL) programs. These programs, while marketed as convenient, are pushing many Gen Z consumers into mounting, often insurmountable, debt. Musk’s stance has reignited debates about the importance of consumer protections as BNPL services grow in popularity and financial risk.
Here are 10 things Gen Z should avoid buying with BNPL services:
- Fast Food and Coffee
Financing everyday meals creates debt for items that are consumed immediately, leaving nothing to show for the money spent. It’s an easy habit that can lead to financial strain over time.
- Trendy Clothing
Fast fashion might feel like a must-have, but the payments often outlast the trends. Instead, invest in fewer, higher-quality pieces to avoid constant debt.
- Concert Tickets
Financing entertainment might feel justified, but the joy of the event can be overshadowed by the ongoing burden of repayment. Save up and enjoy the experience debt-free.
- Tech Gadgets
BNPL for the latest phone or tablet can be tempting, but unless it’s essential for work or education, it often results in unnecessary financial pressure.
- Luxury Items
High-end handbags, shoes, or accessories are status symbols, but financing them can create a cycle of stress and limit your ability to save for more meaningful goals.
- Subscription Services
Monthly subscription boxes or premium streaming plans might seem small, but financing them adds complexity to your budget and can spiral into ongoing debt.
- Furniture and Home Decor
Decorating your space is important, but using BNPL for these purchases can overextend your budget. Prioritize affordability or save up to avoid long-term payments.
- Vacations and Travel
Financing trips might provide instant gratification, but the stress of paying off travel debt can outweigh the enjoyment. Plan within your means for worry-free adventures.
- Everyday Groceries
Using BNPL for necessities like food is a red flag that your budget needs rebalancing. Seek out budgeting resources or community support for long-term solutions.
- Fitness Memberships or Classes
Financing gym memberships or specialized fitness classes can add financial pressure, especially if they go unused. Explore free or low-cost options instead.
Musk’s remarks about dismantling the CFPB underscore the importance of educating consumers about financial risks. Without oversight, predatory practices could become even more widespread, leaving young consumers unprotected. By avoiding BNPL for non-essential items and building smarter financial habits, Gen Z can navigate these challenges and create a more stable financial future.
