'Just Klarna it': Young people are getting into debt using buy now, pay later services
Buy now, pay later (BNPL) services are becoming increasingly popular among young people in Ireland for small, everyday purchases. Financial experts warn that these services can lead to debt accumulation as users may not fully grasp the implications of using credit for minor items.
Why it matters
The normalization of debt for low-cost consumer goods highlights growing concerns regarding financial literacy and the impact of predatory lending trends on younger demographics.
SOCKS CAN NOW be purchased using buy now, pay later services in stores and online shops in Ireland. But is this a good thing?
Buy now, pay later (BNPL) arrangements were traditionally limited to larger products such as furniture, but the popularity of services like Klarna and Humm means buying purchases as small as socks on credit is now accessible.
Rather than paying for the cost of an item upfront, the services let shoppers split payments into instalments spread over time. The services generally make money by through merchant commission fees and charging shoppers late payment penalties.
Several major BNPL services first launched operations in Ireland in recent years. By 2023, nearly one-in-four people surveyed by the Central Bank had used BPNL over the previous year.
The figures indicate the highest rate of BNPL services occurs among people aged 18-34.
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