There are many products in the market that are used to incentivize us, to make purchases whether we have the funds to do so or not. Credit cards are the big brother. The little plastic card that allows us to purchase a product and pay it off over time if so choose. Of course the card charges us interest if we don't pay it all off when the invoice comes in. I the old days there was lay away. You could have a product put on hold for you to purchase on another date when you had the funds saved up. Well there is a new trend starting to become a player in the industry. Buy Now, Pay later apps are almost universal now which allows you to make a purchase, and then pay it off over four easy installments interest free. Sounds great! But we are starting to see more and more of these debts go delinquent and the CFPB is taking notice.
Today the crew discusses the good, the bad and the ugly regarding Buy Now, Pay Later and it may surprise you where they stand
There are many products in the market that are used to incentivize us, to make purchases whether we have the funds to do so or not. Credit cards are the big brother. The little plastic card that allows us to purchase a product and pay it off over time if so choose. Of course the card charges us interest if we don't pay it all off when the invoice comes in. I the old days there was lay away. You could have a product put on hold for you to purchase on another date when you had the funds saved up. Well there is a new trend starting to become a player in the industry. Buy Now, Pay later apps are almost universal now which allows you to make a purchase, and then pay it off over four easy installments interest free. Sounds great! But we are starting to see more and more of these debts go delinquent and the CFPB is taking notice.
Today the crew discusses the good, the bad and the ugly regarding Buy Now, Pay Later and it may surprise you where they stand
Welcome to Talk Wealth to Me, a Safe Space podcast where we chat about anything and everything related to personal finance. The Information contained in this podcast is for educational and entertainment purposes only. It does not constitute as accounting, legal, tax, or other professional advice.
Chase Peckham:Hello everybody and welcome back. This week we are joined again by Katie. Katie, welcome back.
Katie Utterback:Thank you.
Chase Peckham:So happy to have you here today and today's discussion. Phil is, Katie's got a lot to say on this. She just recently wrote a follow up to an article she wrote for debtwave.org a while back. Uh, and now the CFPB is, it's coming back into play again. They, they're making news and it's about a whole new system that's actually been around for a while, but not a lot of people have known about until recently. And it's now it's, we're starting to see that the consumers are starting to get themselves into trouble and that is by now pay later. So Katie, you're the one that has really gotten down and dirty on this information. It seems to me. I have never done it. Uh, but I, it seems to me that it's a cross between legitimate credit cards and something that we see our service members use a lot. Um, and those predatory lenders, uh, in, in payday loans.
Felipe Arevalo:Why don't think service members do the payday loans so much anymore? I think,
Chase Peckham:Well that's because the government
Felipe Arevalo:Kinda,
Chase Peckham:the government told'em not to.
Felipe Arevalo:Right. So I wonder if it's, if this, that's next for buy now, pay later some government involvement.
Katie Utterback:I think so, cuz like Chase mentioned the Consumer Financial Protection Bureau, the CF p b, it's um, it's not like a political entity as part of the government, but it is, there is like a political appointee running the organization. So there can be a little bit of like political flavoring. But generally their role is to try to make it safe for consumers to save, spend, invest their money, and not get involved in traps like payday loans, like you mentioned. That has been a huge trap that I think we've talked about before. And with like after pay carna, like all these buy now pay later apps. When it first came out, I honestly had no idea how it really worked. And so to me it sounded kind of like layaway except for, except
Chase Peckham:To get to take it.
Katie Utterback:Yeah. Instead of waiting to be able to use or wear whatever item it is, you get to have it right away. And for me, when I was looking at after pay and all these different buy now, pay later apps, it seemed like a huge like motivation to use it was to buy fashion, to buy clothes, To buy shoes.
Felipe Arevalo:Yeah.
Katie Utterback:And as somebody who is interested in fashion but doesn't necessarily have the budget to back up what I want, I really was interested in like, how are people using this? How does this work? And so the idea of being able to buy, you know,$500 boots, but divide that up into four payments, like that does sound really exciting. But at the same time, I started to get really passionate about it in a sense that I felt like this was gonna get a lot of people in trouble when you saw a lot of fast fashion places like Sheen popping up who are creating a fashion that was, I mean I think it's well known now that none of the sizes seem to match up. It's common to get something that doesn't fit. It's common to get something that's ripped or whatever. They only make a certain amount of each style. So people go buy new things every day. They wear it once, but they're still paying For it.
Chase Peckham:Very difficult to return too. I have found out, uh, just recently since my 12 year old daughter bought, uh, a pair of pants that didn't fit. I didn't even know what the organization was, but I found out it's a pain in the neck to return
Felipe Arevalo:We even did when we did the swim live for this Katie, and, and this was a while ago, maybe almost a year ago, we even did fast fashion and by now pay later put together because they do go so hand in hand.
Chase Peckham:Yeah.
Katie Utterback:Mm-hmm.<affirmative>.
Felipe Arevalo:And you do have that urge to, it's only a few dollars, you know, the shirts are six bucks, the, you know, everything is so inexpensive. You add a whole bunch of them into the cart and then at the end you get the option to break it down even more and put it in four easy payments, five easy payments or whatever it is. And it's not like layaway where you have to sit there and watch it and change your mind about the purchase. You've already got it, it's already been shipped and now you have to pay it. But you know, what he mentioned is no one's really tracking how many of those little payments you have set up for the future.
Katie Utterback:Yeah. No. And it's actually affecting people who are trying to buy a home because you think, well first of all, these payments are not necessarily gonna show up on your credit report.
Chase Peckham:They don't not yet anyway, so
Katie Utterback:When someone's telling you, Hey, this is how much you can afford, I believe on a house payment, they have no clue that by the way, you're spending$700 extra per month pay off<laugh> one skirt and a pair of shoes or something. I don't know.
Chase Peckham:Right.
Katie Utterback:But I think it's also interesting, like the CFPB got involved because they're seeing a trend that not only does Generation Z not like to use credit cards, so they prefer this style of micro installment loans, but older Americans like millennials, Gen X, Generation X, they're using these buy now pay later apps to pay for groceries or for pet care for childcare. Like basic ne like necessities.
Felipe Arevalo:Every day expenses.
Katie Utterback:Yeah. And that's a concern.
Chase Peckham:It is a concern and that's why I, I said it, that's why I said it's kind of a cross because you know, there may not be any interest. Right. There's so there you're not paying interest like with credit cards, which their interest rates are are pretty crazy right now, especially with the interest rates as high as they are. Um, but if you don't pay that for in that four months and you don't, you don't, uh, pay it off within that uh, required time, you're gonna get penalties which then add to the debt. Um, and so, and those penalties can be pretty stiff, uh, because they're not regulated like credit cards are. Uh, and so I guess when the CFPB is talking about regulating it or looking at regulating it, uh, similarly to the credit industry, it's because as as different as they are, they're extraordinarily similar and they can get you into debt just as quickly if you're not careful.
Katie Utterback:Well also, do you guys remember back in the day when before there was all these targeted social media ads, there were those ad advertisement editorials on tv and then you get a low, low price locked in.
Chase Peckham:Oh Yeah.
Katie Utterback:But you had to call now or call in the next like five minutes and it would be like four payments of 1999.
Chase Peckham:Yep.
Katie Utterback:This is what that sounds like now.
Chase Peckham:Yeah.
Katie Utterback:Right,
Felipe Arevalo:right.
Chase Peckham:Absolutely.
Katie Utterback:And how many people got stuck like buying something? You tried to return it right? To Chase's point, you're stuck trying to return something.
Chase Peckham:Oh yeah.
Katie Utterback:But these payments keep happening. Like you still have to keep paying for it.
Chase Peckham:Oh. And it, they don't make it any even close to easy to, uh, turning it off or, or getting rid of the quote unquote subscription, uh, that it is a giant pain in the neck. I mean, it's dangerous to make any of those calls to buy those kinds of things. In fact, it's funny you mentioned that because it was one that I saw the other day to that was this, uh, beautiful, uh, wax that you would put on your car and it's just incredible and it's only yours for 19 95, 4 easy payments of 1995. I'm like, Oh yeah, I don't want that. It can't be that.
Felipe Arevalo:Plus shipping and handling<laugh>.
Chase Peckham:Right.
Katie Utterback:Well I'm not that, I mean, I'm not that great with math either, so I mean, it would take me a minute, like, how much actually am I paying? Like, cause I'm stuck on this 1995, so, and
Chase Peckham:That's exactly what
Katie Utterback:I'm doing five payments. Exactly.
Chase Peckham:Right. It, it's, it's brilliant by them. I I mean it's, there's smart people putting these things together that take advantage of a lot of people. Now is that to say that smart pe that that that people shouldn't be responsible for themselves when they're getting into purchasing something like that? Um, that's where I have a really hard time is look, I mean it's not their fault that people aren't reading the, the small print. Uh, that, that people are a little bit, uh, quick into purchasing something. Uh, they don't know exactly what they're getting into. But I think we all fall prey to that. And really that's what the CFPB was created for in the first place. Cuz the CFPB was not a thing until 2010. After the 2008 uh, crash, the CFPB was created to regulate lending.
Katie Utterback:Mm-hmm.<affirmative>.
Felipe Arevalo:And I think because it gets broken down into so many little payments and because you don't have necessarily a central place to put it all and because there's so many options for buy now, pay later companies, I think consumers, it becomes a little too easy to go, well it's just a hundred dollars. Um, I wanna pay a hundred dollars now and then I got three more payments of a hundred dollars. And then they leave that store, go online, go to any one of these major retailers cause they have'em met Target they haven't at all these other places. And then say, well this is only 50 bucks and I could do 50 now and I'll pay 50 later. And they do that at a couple different stores. Now they're looking at, you know, 50 plus, a hundred plus another a hundred, you know, three,$400 that they just signed up for four more payments of that.
Chase Peckham:Well I would imagine that this really got big too during the, the, uh, pandemic, right? I mean people are sitting at home, they're kind of bored or they've been laid off. Uh, you know, there's a number of reasons that I would imagine that this made it just so easy to be able to buy at home and, and get delivered.
Katie Utterback:Yeah. It exploded in use during the pandemic. And I think part of that too, as people like myself, I historically preferred to shop in a brick and mortar experience. And part of that was because it helped me limit what I could buy because I<laugh>, this is actually a true story. I was in a world market and I somehow had added like multiple rugs, like furniture to my cart. It didn't fit in my car<laugh>. So now when I go shopping at a brick and mortar store, I'm very aware how much can I carry, how much can fit in my car?
Chase Peckham:Not Only can I afford it, but can I actually physically get it home.
Katie Utterback:Exactly. So I was like that person in the parking lot, like trying to figure out how to open that little, um, back part.
Felipe Arevalo:Oh the midle?
Katie Utterback:To like shove the rug all the way through as much as I could. But I mean, I got it home, It worked, it was fine, but I've also been in line waiting to try on stuff in a dressing room and I've just literally just been holding something and I didn't wanna hold it anymore, so I put it back. But when I'm shopping on Amazon or Etsy or anything online, that cart is doing all the holding for me and sometimes I forget.
Felipe Arevalo:Never gets full.
Katie Utterback:what I've added. Yeah. Never gets full. It even reminds me, Hey, by the w ay, you left this in the c art
Felipe Arevalo:There, got some things in here. Did you mean to check out<laugh>? Yeah,
Katie Utterback:But I think like, it, it just kept driving this whole like spend, spend, spend. Because you can break it down and there was, it didn't seem like there was gonna be any sort of penalty. There is, but it didn't seem like it.
Felipe Arevalo:I think now that it started to affect lenders and, and some lenders are lending more than they should because they can't see how much in fact people owe. Cause it doesn't pop up on the credit reports. I think that's going to trigger new regulations to that industry because now all of a sudden the big banks, all the lenders are on board with, I don't know if this is good for me, you know, this could really mess us up. And um, I'm, I think we should, uh, take a look at those guys over there. And I think that's gonna push the, the envelope here to, to get more regulation on some of this, which might not be a bad thing for consumers. Well
Chase Peckham:It's interesting because, you know, like for instance, Amazon right? Makes things so easy to return if you don't, you know, you don't for some reason you don't need it, it doesn't fit or whatever it is. It's like Costco, even though Costco's brick and mortar and you can order it online, but it's, they make it very easy to return the products. Uh, but with this, it seems the buy now pay later stuff, you know, how much money are, are they gonna end up losing when people are returning that? Cause they only, what you pay a small what, one quarter probably of the total cost, uh, like a down payment. Um, and then you make those four, you make those four installments. But then what if somebody returns it? How do you get, I mean, do they return your money right away? How does that work? It seems to me, and this wasn't by now pay later, I paid a different way for that Sheen or whatever it was. But still it's been a giant pain. To return it,
Katie Utterback:I'd have to double check. But I'm, I think it's a store by store basis.
Chase Peckham:Okay.
Katie Utterback:So every store or I don't know, service or that allows you to split up your payments through a buy now pay later app. They pay to offer that service. Like, so if somebody offers after pay, they're paying after pay in order to offer that to you.
Chase Peckham:Gotcha. Okay. So, and that actually has to make it relat. I I I would imagine that the, those stores that allow those, that's gotta be great for them. That's gotta boost sales. Uh, and, and not affecting them whatsoever except for paying a little bit off the top to those apps.
Katie Utterback:I would assume it would be similar to offering like credit card payments.
Chase Peckham:Yeah.
Katie Utterback:They pay like what, one to 2%.
Chase Peckham:mm-hmm.<affirmative>.
Katie Utterback:like processing fees that, so I would assume it would be similar to that.
Chase Peckham:Yeah, that would, that would completely make sense.
Katie Utterback:But I do think like there are people who have benefited from this. They know exactly how to budget their money. They know how to split up these payments in a way that works for them. And I think that's great. But I think that overall, generally this has been a very toxic like system.
Chase Peckham:Well,
Katie Utterback:and I think it's encourag
Chase Peckham:You think that people, do you think that these companies are, um, that they're, that they're actually predatory tactics? I mean, is this something that you think that they're going after specific, um, communities and that kind of thing?
Katie Utterback:I mean, personally I do. And I'll tell you the reason why I feel that way is because as a millennial I am not getting marketed with buy now, pay later, like Generation Z is at all. Um, additionally, part of that ties into fast fashion. So I make a conscious choice not to participate in fast fashion because of the environmental harm.
Chase Peckham:I didn't, didn't even know what fast fashion was until I read your article.
Felipe Arevalo:<laugh>.
Katie Utterback:Yeah. So fast fashion is basically like printing, producing clothes as cheaply as possible. Using as like cheap materials, cheap dyes. And a lot of that involves a lot of water waste, a lot of water pollution. Just a lot of, like, you've seen those pictures of those toxic mounds of trash in the Pacific or.
Chase Peckham:That's gross.
Katie Utterback:Anything like that. There's a hu like I think the fashion industry is like the biggest polluter in the world or one of the biggest polluters in the world.
Chase Peckham:Yeah.
Felipe Arevalo:You use cheap labor in far away places and now you got shipping costs and shipping.
Katie Utterback:Exactly. And so when you have people buying clothes every day and then they're just throwing them in the trash can like, like seriously like forget the financial impact of that. Like what are you doing?
Chase Peckham:Right.
Katie Utterback:You bought a shirt for$6 and you throw it away in the trash, Can you buy another one? That doesn't make any sense. And I think like that kind of, uh, marketing to make that a, a lifestyle that see like, it's not sustainable, but they're marketing it in a way that it does sound sustainable and strip away the environment stuff. Just focus on finance, financial side of it. How are you going to be able to afford buying a new$6 shirt every day for the rest of your life?
Chase Peckham:It makes no sense. Oh yeah. That makes no sense to me at all. And I, I didn't know I, you know, shoot, it wasn't until Felipe mentioned the name of that company, I had no idea what my daughter was buying. And that, you know, that says, I hope that doesn't say a lot about the parenting, uh, that I am, but I, uh, unfortunately, you know, I'm, I'm a now.
Felipe Arevalo:You're not a fashion guy.
Chase Peckham:Father and I'm not a fashion, I never bought clothes for my kids. My, my wife did all that. So now I'm doing that. But my kids are also very aware of fashion themselves. Uh, they are, well my daughter is, my son doesn't give a hoot about what he wears. Um, thank goodness for private school cuz he doesn't have to be told. He, he, he's told what to wear so that, that's not, that's a good thing for him. But my daughter, she knew right where to go and bought all these tops. And I'm like, Oh, okay, well that's a pretty good deal. I had no idea.
Katie Utterback:And I bet you.
Chase Peckham:what it was,
Katie Utterback:There was some connection to social media like TikTok or Instagram.
Chase Peckham:Oh guaranteed.
Katie Utterback:Or Snapchat. So that's kind of like,
Chase Peckham:Not TikTok, I don't allow her to be on it, but,
Katie Utterback:But I've heard of there, I've heard that there's people on TikTok who literally just do, um, like Sheen or whatever, trys and like, this is what I ordered today. And so
Chase Peckham:Influencers quote unquote, that's a fact. I mean I gar I almost guarantee it, uh, that that's exactly, in fact I do guarantee it. That's exactly where the young people are getting everything. TikTok uh, it's, it's been talked about. I mean more, more people, especially the younger generation uses that technology. But even, uh, even uh, US Gen Xers are getting into the mix, uh, a bit. The millennials, I mean, it's probably not as high concentrated of purchases through those apps, but it's extraordinarily high and they're as almost as much as when you just googling information and buying things off, uh, when you're looking for different stores, uh, through Google or different products.
Katie Utterback:Oh yeah. And I even actually get emails from stores that I shop at. Like by the way, we're, we're now offering after pay or we offer this now,
Chase Peckham:Different ways to get'em in the store. Any way to get somebody in the store, whether it's virtually
Felipe Arevalo:Sarah said it's a, it's a hot topic in her Target group on Facebook, people talking about the after pays and sometimes how great it was, sometimes how detrimental it has been. Uh,
Chase Peckham:Wait, wait, wait, wait, wait. Sarah's in a Target group?
Felipe Arevalo:Yeah. On Facebook. They talk to everything Target
Chase Peckham:What's a target group? Everything Target really. Department store, Target.
Felipe Arevalo:Yeah. Target.
Chase Peckham:She is in a Facebook target group.
Felipe Arevalo:Uhhuh.
Chase Peckham:Oh, can you get Sarah on this please? I would love to sit and talk to her.
Felipe Arevalo:We might have to do an episode on Target group.
Chase Peckham:Yeah, I want.
Felipe Arevalo:On Facebook groups.
Chase Peckham:I<laugh> that just makes me laugh.
Katie Utterback:But see that's, that's, that's what I'm talking about. If you see something in this, this is why I can't be in this kind of group cuz I would go immediately buy it. But if somebody shows you something really cool and then you wanna go buy it, but they're offering after pay, so you're like, well I can't really make it in my budget, but if I do this then I can make it work. Well, what happens if you run into an emergency? Because if anybody has paid off debt before, you likely know that if you have a plan for your money and it requires everything to go smoothly as possible, it's probably not gonna work.
Chase Peckham:Yeah, Yeah. I mean, look, like you mentioned earlier, there, there are people that this is works wonderfully for and those are the people that are ver they're, they're naturally, um, they're organized. Uh, they, they, they are very good with their money, but you know, there's, there's always gonna be people that aren't. Um, and, and if I would tell you like, you know, this has been around for a long time. This isn't a new thing, it's just a different type. It's when you open up a credit card account at Best Buy, let's say, and you're gonna buy electronics and it'll say, you know, you can buy this product. Um, and it's 24 months interest free. If you pay it off in 24 months, then it's like cash. Well, good for you. If you are organized enough to do that and you know that you have the money to do that. Bottom line is anybody would tell you who works in finance that if you can't afford it, don't buy it. And obviously that's when we're not talking about necessarily a vehicle which you need to get around in. We're not talking about a house that, um, typically will go up in value. Uh, but when it comes to everyday things, everyday uses clothing, those kinds of things, if maybe you shouldn't buy the shirt, if you can't pay for it right off the top. I mean, that just kind of seems like common sense to me
Katie Utterback:When I actually have a separate blog from my fashionistas, my fellow fashionistas I should say.
Chase Peckham:Okay.
Katie Utterback:And I have tips from my style expert who is a financial genius. And so there's certain things you can do. So like fast fashion for example is very trendy. It's very, it's in style for like two weeks, two to four weeks.<laugh>. That's fast fashion. That's why we include the word fast.
Chase Peckham:Wow.
Katie Utterback:So if you're gonna buy something like this shirt that I'm wearing, you can't see it in the audio, but you guys can see it. I have had this shirt for eight years. I wore this the first date that I ever had with my husband.
Chase Peckham:Wow.
Katie Utterback:And it, it's from Los Angeles, it's handmade, but it was$88 from Macy's when I bought it eight years ago. And it sounded like a ton of money to spend on just like a black scoop neck shirt long sleeve shirt. But it has lasted me so long that like.
Chase Peckham:Get what you're paid for.
Katie Utterback:Exactly. I think that that's kind of where I,
Chase Peckham:What other cliche we want penny wise and dollar foolish. What else can we pull out
Katie Utterback:<laugh>? No, but I think it sounds like it's obvious, but it's true. Like if you're somebody who's an emotional spender like myself, buy now, pay later is probably something that's gonna get you in trouble. But if you're somebody who is very on top of your budgeting and you know exactly how much money you have in you have some sort of cushion, this might be the perfect opportunity for you to buy a little treat yourself gift or something.
Chase Peckham:Right. Yeah. I mean that's why, you know, I was, I was not a big fan of the CFPB when it was created. I, I don't like necessarily regulation, although I do think that there needs to be some parameters that aren't predatory. But for the most part, we can't call companies predatory just because there are people that just can't say no, that can't say no to the product. Um, now if there are practices where it's very difficult to return, uh, something, if it's something that there you can't find anywhere to stop, uh, your, your payments, uh, or to cancel, uh, that, okay, that's a whole different story. That's something that we need to look at. Um, but buy now, pay later just, I mean just in the, just in the name of it, it makes me, I would be cautious, but then again, I guess I do this for a living and we hear all kinds of horror stories and we know the things that people get themselves into financially the trouble that they get into. So we're always a little bit worried about that. But I mean, the days of us financial professionals saying, you know, hold onto your cash and only use the cash you spent. That's not, that's great in theory. But we, we, we live in an electronic age where just yesterday I was, uh, oh, Sunday I was going to pick up wings for this non shaky, shaky board party that we were watching for football and baseball. And they didn't take cash. They were a cashless retail store.
Katie Utterback:Yeah.
Chase Peckham:I'm like, wow, all right. So if I don't have cash, I gotta use my debit card. But at the same time, we now have to look at cash in a different definition. It's gotta be how much is in your bank account. And that's really what it is.
Katie Utterback:Yeah, that's a good way to put it. Cause you're right, there's so many rules that have changed.
Chase Peckham:Yeah,
Katie Utterback:like cash,
Felipe Arevalo:I was on
Chase Peckham:Cash is king
Felipe Arevalo:Cash,
Chase Peckham:Right?<laugh>? Yes it is. But they mean that in a different way. Right? That doesn't mean under your pillow. That means what you have liquid. So if you, when you hear, if you, this is why I say if, if I can't, if I don't have the$50 to buy the shirt I want, I'm definitely not gonna go say, well then I'm gonna spend 13.50 over the next three months so I can afford that shirt. It just That's right. I can wait.
Felipe Arevalo:Cash is different. You know, we did the whole episode on cashless venues and things like that.
Chase Peckham:Yeah.
Felipe Arevalo:But there was a tweet going viral I think Monday that um, someone said like, what would you do if you had a hundred thousand dollars cash? And everyone was in there commenting and the little smart alec in me went in there and said, What? Put it in the bank. That's a lot of money to be walking around with in your pocket. You, you don't wanna drop that.
Chase Peckham:Yeah.
Felipe Arevalo:Because it, it's still cash. If it's in your, I mean if you're holding actual physical money or if you put in your bank account and you use your debit card, you could still then go do whatever it is that all the other people were Saying.
Chase Peckham:That's right. And you have some for,
Felipe Arevalo:there's some protection.
Chase Peckham:Protection,
Felipe Arevalo:your safety.
Chase Peckham:Yes.
Felipe Arevalo:Your money's not, you know, you're not gonna drop it and lose it or have it stolen from you. Right.
Chase Peckham:Cause when it's gone, it's gone.
Felipe Arevalo:Yeah. So you, you still cash. I I I think of debit cards as it
Chase Peckham:Is cash. That's the way I think of it now. It totally is. It's Just, it's just your money. You know, it's just an electronic form of your cash. Right. A hundred percent. I mean you've gotta think of everything being in cash and whether it's pay now, pay later, a credit card, uh, whatever it is that you're using, whatever tool, whatever financial tool that you're using needs to be thought of as being used wi as cash. And if you do that, then you're gonna, you're gonna be in decent shape. And there's gonna be a lot of people that use credit cards to their advantage because there's, there, there can be very advantageous to the different types of, uh, miles. You can get cash back, all kinds of incentives and if you use it correctly, those can be very powerful. But the cha but most people aren't. And that's why these, the credit industry and banks make a ton of money and retailers aren't gonna offer something if they're not gonna make money. The retailers like these apps, they like technology cuz what does their bottom line sell? And if they have any different way they can get people to buy their products, why not? And if I were in business, I guess I would do the same thing because for me, I'm just saying is there a sale or not?
Felipe Arevalo:I don't blame the retailers. They're just offering you the convenience of paying you in another form. You know, although falling in debt, whether you did the buy now pay later or someone did an old school credit card swipe, they're still falling in debt if they can't afford it. Right. So then it just becomes onto the consumer of which kind of debt I wanna fall into.
Chase Peckham:Correct.
Felipe Arevalo:As a retailer,
Chase Peckham:Just think about what you just said. What kind of debt do I want to fall into?
Felipe Arevalo:That's what it is really.
Chase Peckham:I Know.
Felipe Arevalo:It's, they could swipe their credit card or they could say, Oh I'll do this. Buy now, pay later because it's interest free
Chase Peckham:And in their mind. And if
Felipe Arevalo:You do it right, yes, it could be.
Chase Peckham:But if you do credit card, right? It could be,
Felipe Arevalo:although you might get more time to pay it off with the buy now, pay later. If it's like two weeks, four payments, the first one there on the spot, then two weeks, then two weeks. Technically you Could,
Chase Peckham:let me ask you this, what if you did buy now pay later 12 different purchases in a month?
Felipe Arevalo:Oh would get it Overwhelming and
Chase Peckham:Yeah. Wouldn't it? Yeah, I think so.
Felipe Arevalo:Well I wouldn't use it, but I'm just saying I think that's part of the problem is because you're thinking I only have to make this one payment and then two weeks later you got that payment and if you're still using it two weeks from now, now you're overlapping.
Chase Peckham:It's no
Felipe Arevalo:One payment with the next payment, with the next payment. You might be overlapping three or four different cycles of purchases by the time you get in and you just get, now you don't have enough money to make the next purchase
Chase Peckham:I find it overwhelming getting all my bills paid. Not that I can't financially just that I remember everything. I literally have to have my spreadsheet open every day to make sure that something gets paid on time. And that sounds, people are probably like, Hey Chase, what are you, what's, what's the big deal? I haven't done it in 19 years that I was with Keri. She was the bill payer. I knew what we were spending, but I didn't physically pay the bills. Now I do. And oh my gosh, sometimes it's overwhelming. I can see why people forget. It really can freaks me Out.
Katie Utterback:I have to have a spreadsheet too. I have to like go down and like make sure I paid everything. And that's why like when you're saying like splitting up the payments, even for just one, I'd be like, well is this the third payment, the fourth installment, Did they charge me another like additional installment?
Felipe Arevalo:Right?
Chase Peckham:Right.
Katie Utterback:We have like 12. I'm, I can't, I can't
Chase Peckham:<laugh> I'm telling you, I'm I am a hundred percent with you. It it is, it's a bit nuts. Uh, it it's it's a lot nuts. Uh, it's, it's, you guys are gonna laugh at this. Um, but uh, where, where to go. Um, can you guys see that?
Katie Utterback:Yeah.
Chase Peckham:Okay.
Felipe Arevalo:Yeah.
Chase Peckham:Okay. You can see this is what I have to go off of and I have a lot of things on autopay and I know how much exactly that's going into those. But then I have the certain ones that have to be paid online that I have to go to and physically get'em in by the certain dates. This is open every single day. You say I have things yellowed off<laugh>. I have since my wife passed, I have had to become extraordinarily organized otherwise things just don't happen. Um, and that buy now pay later. If I ever had to do that, that I don't know what I would do. Cause I would, I would get so.
Felipe Arevalo:Start another spreadsheet.
Chase Peckham:Oh, I don't want
Felipe Arevalo:Just for that<laugh>
Chase Peckham:Spreadsheets. Give me the the, Ah,
Felipe Arevalo:you can start another spreadsheet.<laugh>
Chase Peckham:<laugh>, come on, it is nuts.
Felipe Arevalo:Or add another tab to the one you put.
Chase Peckham:And the last thing I want is to create another account with another password. I don't want any more of those. I've had to, you guys have no idea, I've had to close so many apps that Keri it opened and that she shared with me. Like we download and I'd use her account or whatever because as a family, why have five separate accounts? And if you're.
Felipe Arevalo:Right,
Chase Peckham:uh, like for instance just a Chick-fil-A app, right? You go to Chick-fil-A with the kids, you use the app, you build these reward points, you get all these things and if Carrie and I had separate ones, we would be that we wouldn't be building the same amount,
Felipe Arevalo:Separate rewards.
Chase Peckham:Right? We would. Right. So but now that Keri's pa all the things that were in her name, you I, you should see it. I've had to go through and change all these things, all the payment methods, all I mean, and then, and that's just the easy, that's just the easy stuff, right? Then it's, it's been mindbogglingly difficult to handle. Not to mention the emotional side of it where every time you're talking to somebody, you gotta hear, Sir, first of all sir, we'd like to, you know, give our condolences and you get that for the 500th time and it's just going whatever. Thank you, I appreciate that. Can you just fix the Dan Dang account? That's why these pay now do all that kind of stuff. It's, I can see why people, the older generation, like our parents just are finally just, they're just saying, no, I can't keep up with this crap. Cuz you, especially those that aren't using computers, could you imagine if they were trying to write this all down on a piece of paper, like my dad's law pad<laugh>, He's No way he'd be lost. Crazy.
Katie Utterback:It's just sad that there are some seniors that have to use it for your groceries right now. I
Chase Peckham:Yeah,
Felipe Arevalo:I'm surprised they'd do it at grocery stores. Like I get why the grocery store would do it, but can imagine
Chase Peckham:You're Paying, paying. Can you imagine? But some people use the credit cards. I guess it's the same thing. You're buying food, you eat it that week and you're paying for it four months, five months later, I guess. You know, same thing with a restaurant. Use a credit card, Put it down.
Felipe Arevalo:Can you use by now pay later to pay off a Tab?
Chase Peckham:I would bet not, but I bet maybe, maybe. I Don't know.
Felipe Arevalo:It's a matter of time.
Chase Peckham:Probably. That's a good question.
Katie Utterback:That kinda kinda sounds like a different kind of debt
Chase Peckham:<laugh>, so Yeah, it sounds terrible to
Speaker 4:Me.<laugh>,
Chase Peckham:That's, that's no good. Well, look, um, I I, I hope it'll be interesting to see what the CFPB comes up with on this, but I, as I would tell any of our listeners, just be organized when you're making payments, when you're making purchases like that. Um, it all sounds good when you're laying in bed late at night and you know, maybe you've had a couple cocktails and that's really fun. Uh, be careful what you get involved in and what you get, uh, what you click. Yes or, you know, submit. Uh, it can get you in a lot of, a lot of issues. Um, with that like us, submit that, submit that you like us, give us a five star review and uh, we'll see you next week.