Luyện nói tiếng Anh bằng Shadowing qua video: The 'Buy Now Pay Later' Trap, Explained

Why is paying for so addictive?

They literally once financed a bottle of body wash.

You know what?

I'm gonna after pay this.

It's gonna make me feel less guilty to pay it in four installments of $81 or whatever.

That's like having a Black American Express to me.

I can use it anywhere, anytime I get ready.

I'm using Klarna to pay for these Chris Browns.

Look at this chart right here.

This shows the total non-housing consumer debt in America over the last 10 years.

And in 2024, Americans collectively owe more than $5 trillion, which is enough to pay for every NFL,

NBA, and MLB team 10 times over.

And to make matters worse, we are constantly surrounded by psychological tricks and hidden fees to drive us further and further into debt.

The worst of these tricks, the buy now, pay later programs that have been designed to take advantage of young adults.

So when you buy a $100 pair of shoes and you only have to pay $25 that day, and then the pair of shoes show up at my apartment three days later, the shoes are $25.

Why do I care if in two months I have to pay another $25?

I don't know me two months from now.

She can deal with that.

I Now Pay Later is a short-term financing option that is offered by companies like Affirm, Klarna, or Afterpay.

You'll typically see these options pop up on e-commerce stores, offering you the ability to buy what you want today while deferring your payment over a certain number of installments.

So if you're looking to buy a new suitcase for a trip you have coming up and it's going to cost you $300, dollars instead of paying that all today you could buy the suitcase today

and then split the 300 across four equal interest-free payments

and you might think great interest-free i can just sign up for these payments

and then worry about paying it sometime later down the road

but it's not quite

that simple these buy now pay later programs aren't necessarily groundbreaking

financial technology in fact buy now pay later programs are kind

of a newer modernized version of the old school layaway programs

that you would see at stores like kmart

and sears these layaway programs allowed you to place a deposit on an item like a dishwasher, for example, and then the store would reserve

that dishwasher for you to collect once you had paid off the dishwasher through their installment plan.

But these layaway programs kind of fell off throughout much of the mid-20th century, mainly due to the introduction of credit cards and revolving lines of credit.

Instead of using a layaway program and waiting to collect their item, people could just swipe a credit card, get their item today, and then worry about paying off that over the next couple months or years.

The only The problem is that a credit card will incur interest.

People realize that if they didn't pay their credit card down on time, they would end up owing more than they initially spent on the item.

So along came the modern marvel that is buy now, pay later, which gave you the best of both worlds.

Get your product today, paid off over a longer period of time, all while doing it interest free.

And that idea began hooking people in because buy now, pay later has seen some explosive growth over the last five years,

going from $2 billion in transaction volume in 2019 to 24.2 billion in 2021.

And it's projected to reach as high as $122 billion in 2025.

But this explosion wasn't just happening in a vacuum.

It's actually part of three major cultural shifts

that we've been seeing first is the financialization of everything meaning

we've moved from a completely cash-based society to a society in

which we look at even a five dollar coffee as an

opportunity to finance the transaction second we have the rise of social media driven consumption as influencers showcase luxury lifestyle

and products buy now pay later allows the average consumer the

ability to to experience those same things without actually incurring the cost today.

And third, we have the post-pandemic spending boom, which has consumers using buy now,

pay later as a form of revenge spending or buying things they feel like they missed out on during the pandemic.

Combine all of that with the declining financial literacy among most young adults, and you have the perfect storm to make buy now, pay later explode as a new mentality.

But why is this even a problem?

If they're not charging interest, how can they actually be taking advantage of me as a consumer?

To answer that question, you first need to look at the differences between buy now, pay later programs and traditional credit cards.

Because on the outside, they're basically the same thing.

Both financial devices allow you to buy something today

that you might not necessarily be able to afford or be willing to put cash down today for.

But a credit card usually involves some sort of approval process, application, review, and a credit report hits.

Meanwhile, buy now, pay later programs offer an almost instantaneous approval for your purchase in the moment.

Additionally, as we discussed, credit cards can accrue interest if not paid off by the end of the month.

And that rate can be at crazy high rates, usually around 19 to 23%.

On top of that, if you're late with your payment or you miss a payment, credit card companies can also add on late payment fees

that just end up water falling you into insane amounts of credit card debt off of fairly simple purchases to begin with.

And on the other hand, buy now pay later offers 0% interest, which sounds great, but that all depends on if you actually pay your payments on time.

If you don't, you'll be subject to late payment fees

that can range anywhere from two to $15 per payment

and going all the way up to 25% of the total value of the purchase you made initially.

And with all that said, buy now, pay later still might sound like a perfectly good alternative to credit cards, which is exactly what they want you to think because buy now,

pay later programs weren't necessarily designed to help the consumer like you or me.

They were designed for stores and brands that want to sell more through their website or in their stores.

After all, that's why brands are willing to pay two to 3% more

for their transaction fees to use a buy now pay later program versus a traditional credit card processor.

To give you an example, let's look at a $100 purchase.

If you bought a $100 item using a normal credit card on their site, the brand was typically going to incur about a $2.50 charge to process that payment.

And on the other hand, if you were to use a buy now pay later program, that transaction fee that the brand has to pay goes from $2.50 to about $5.

But the merchant fees are just the beginning when it comes to buy now pay later.

So let's look at how these companies actually make money beyond just charging the brand that hosts them on their website.

First, like we just discussed, they're gonna collect that merchant fee, which is anywhere from four to 6% of the transaction price.

Second, they profit from late fees, like we talked about earlier, which has turned out to be a pretty substantial revenue source for companies like Affirm and Klarna,

because one in every three users of these Buy Now, Pay Later programs actually ends up missing a payment at least once.

And third, every purchase that is made reveals something about you or your shopping habits.

And these companies have realized that that is very valuable information for other brands.

So they actually harvest a lot of the data from your checkout pages

and then sell it to other brands that can then use it in their marketing or in their ad target.

And finally, they benefit from the sheer volume of loans being opened up by packaging yours

and everybody else's debt together and selling it to larger financial institutions.

They can make money even when you pay on time.

In other words, they've created a system where they win no matter what happens to you financially.

So now let's look at buying an iPhone for $1,000.

When you reach the checkout page, you have three options.

Number one, pay the full $1,000 up front.

This is the simplest, cleanest, and easiest way to get out of the checkout scotch-free.

Option two, you could use a credit card with the typical 22% APR to purchase the phone.

And if you only made the minimum payments, you would end up paying about $1,480 over the course of five years, with 480 of that being the interest alone.

And option number three is you could use AfterPays for payment installment plan where you pay $250 today

and then $250 every two weeks until the plan is paid off, which sounds like the best deal to you.

You see, brands have mastered psychological manipulation throughout their website, but specifically on the last hurdle, which is the checkout page.

And they do this through four key tricks.

First, they exploit what psychologists call the pain of paying.

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By splitting the cost over a longer period of time, your brain actually registers less financial pain than paying the full amount up front.

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Second, they trigger what is called the temporal discounting, which is our tendency to value immediate rewards more than future benefits or otherwise known as instant gratification.

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Pay just $25 today and it's yours sounds a lot better than waiting and saving up for it.

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Third, they will create artificial urgency by simulating limited time offers in the checkout page.

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And finally, they use colors and shapes to direct your eye exactly where they want you to be looking.

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Have you ever noticed that the buy now, pay later button is often highlighted in a brighter color and it's sometimes even pre-selected when you reach the checkout page?

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These aren't accidents.

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These are specific design decisions to short circuit your brain to

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making a financial decision more on an impulse than with rational thinking.

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Instead of thinking about a $100 purchase rationally and over a longer period of time, they'd rather have you just click the pay $25 now and worry about it later on.

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And again, this isn't necessarily a bad deal

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because people are always looking for interest-free ways of purchasing things

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so that their money can go and earn them more money while they're paying off the other thing that they purchased.

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But to do so requires some financial education or experience.

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And sadly, most Americans are completely undereducated when it comes to financial literacy.

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So the instant gratification syndrome kicks in and they buy practically everything with buy now, pay later with no real concern that they will in fact have to pay that off at some point.

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All they're worried about is the price that they will pay today, which is exactly how you end up with this.

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I've done groceries.

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I've done all kinds of crap on a firm in Klarna, but it adds up and then you are in a chokehold.

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And in some ways it is worse than having credit card payments.

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It's crazy.

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Because buy now pay later is so easy to do.

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People are starting to use it on more and more occasions where it's really not meant to be used.

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Instead of just using it on a big purchase like a new fridge or a TV,

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they're starting to use it on smaller things and truly financing items that have no business being financed.

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A crazy story that we recently saw is that Klarna is now on DoorDash,

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which allows you to finance your $15 burrito over four payments of $3.75 instead of paying the full $15 upfront.

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Again, not a necessarily terrible thing when looked at in a vacuum,

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but when you expand this to consider that someone who's financing a burrito is also probably financing a lot of other things, that's when the real problem starts to arise.

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Bad spending habits like this lead to what we call loan stacking, pretty much what it sounds like, taking out loan after loan after loan and stacking them on top of each other.

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And because Buy Now Pay Later programs make it so easy to do so, most consumers don't even realize how much debt they're actually accruing.

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In fact, in 2022, 63% of buy now, pay later borrowers had more than one loan going at one time.

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And this is where it gets really scary.

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Because these programs are designed to offer credit with little to no approval process, it's almost like they're targeting people that don't know how to manage their money.

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All they see is, oh, I can buy this $1,000 thing for $250 today, and they just click buy.

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When in reality, over 69% of buy now, pay later users are already in debt on another credit card.

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And 28% of buy now pay later borrowers are between the ages of 18 and 24 years old.

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Most of these people don't even understand the concept of how a credit card works, and by giving them this buy now pay later option, it's almost like they have this unlimited stream of money that never needs to actually be paid off.

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Again, don't get me wrong, there are definitely some advantages to the system if you know how to play it, but the vast majority of people using the system are not taking advantage of it,

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they are just getting taken advantage of.

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So what do you do?

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As a consumer, should I completely stay away from buy now pay later, or are there some circumstances where it makes sense?

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And to answer that question, the most important piece of advice I can give you is to never spend more than you currently have,

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whether that be through a credit card or a buy now, pay later option.

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If you don't have the cash in your bank, don't spend it.

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And that is by far the easiest way that you can keep yourself out of credit card debt.

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And if you feel confident in your financial abilities, feel free to use a credit card or buy now, pay later option to earn more interest on your cash while sitting in your account versus just spending it immediately.

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But if you don't feel confident about this, treat your credit cards in a buy now pay later program as

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if it's hooked directly up to your checking account

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if you spend 100 that's 100 coming directly out of your

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account another tip i have is to avoid stacking these loans

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because that is where things can get very messy very quickly

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if you start financing weekly expenses like gas groceries or

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that friday night chipotle bowl it becomes a slippery slope

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because it is 100 times easier to get into debt than it is to get out of debt

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but there you have it the truth about buy now pay

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later these companies spend millions of dollars in psychological research to get you to spend more than you can actually afford.

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But now you know a little bit more about how to protect yourself.

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And if you like this video, make sure to check out this video that covers the business of Formula One

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and how billionaires use debt to fund their crazy hobby of racing.

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323 câu

Tình Huống Thực Tế

Trong video, một người chia sẻ về việc sử dụng các chương trình "mua ngay, trả sau" và cách chúng ảnh hưởng đến tâm lý người tiêu dùng. Tình huống này rất quen thuộc với nhiều người, đặc biệt là giới trẻ hiện nay. Khi bạn nhìn thấy một món hàng mà mình thích, chẳng hạn như một đôi giày mới, việc chỉ cần trả trước một khoản nhỏ sẽ khiến bạn cảm thấy thoải mái hơn nhiều. Điều này khiến bạn dễ dàng quên đi trách nhiệm thanh toán trong tương lai, khi mà thực tế bạn sẽ phải chi trả thêm sau đó.

Cụm Từ & Cách Diễn Đạt Hữu Ích

Buy now, pay later: Mua ngay, trả sau
Interest-free payments: Thanh toán không lãi suất
Consumer debt: Nợ tiêu dùng
Short-term financing: Tài chính ngắn hạn
Psychological tricks: Mẹo tâm lý

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Những cấu trúc người nói dùng nhiều nhất, kèm đúng cụm từ trong video:

Cấu trúc	Trong video
Câu điều kiện if + mệnh đề, will/would + động từ — điều kiện và kết quả	If you don't, you'll be
Câu bị động be + quá khứ phân từ — nhấn vào việc xảy ra, không phải người làm	have been designed · is offered · were designed
Thì hiện tại hoàn thành have/has + quá khứ phân từ — việc đã xảy ra nhưng còn liên quan đến hiện tại	have been designed · has seen · we've moved
Mệnh đề quan hệ who / which + mệnh đề — thêm thông tin về người hoặc vật	trillion, which is · boom, which has · cards, which is

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