Phantom debt is having a 'seismic impact' on consumer credit: Splitit CEO says

US credit card debt hovers around $1.12 trillion for the first-quarter of 2024, according to the Federal Reserve Bank of New York, also finding 15% of Gen Z consumers to have maxed out their credit cards. Parallel to consumer trends, retailer Macy's (M) reported credit card delinquencies to have risen 8.9% in the last year while more "buy now, pay later (BNPL)" borrowers are late on their payments.
Splitit CEO Nandan Sheth sits down with Brad Smith on Wealth! to discuss the "phantom debt" in credit markets perpetuated by BNPL plans. Phantom debt is traditionally characterized as old, forgotten, already defaulted, or debt that does not exist that collectors still seek repayment for, which in this case is specific to BNPL payments that aren't closely monitored by credit agencies.
"We just did a survey and it noted that one-third of individuals that sign up for a 'buy now, pay later' plan do not know that they're originating a new loan. And as you know, those plans are not being reported to the credit bureaus, so it's hidden from the ecosystem," Sheth says. "You probably also noticed today... that the CFPB announced that they're going to regulate 'buy now, pay later' on par with credit cards, which tells you that we need more responsible lending in this space."
#youtube #creditcards #stocks
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[@Goldenj360]

I’m shocked, yahoo actually reporting on something important. Now get the regulators to force BNPL companies to release credit delinquencies before this market collapses.

[@pcpxbotendorastermace9948]

What a golden idea

[@Seanpfree]

First-time home ownership is OVER. "Starter home" mortgages in Tennessee are $3500/month. We've put in 77 bids in middle TN on first home and were outbid by cash investors EVERY TIME. Now, we're priced out due to price and mortgage rates. Wonder why Millenials and Gen Z are doom spending? Not getting married? Not starting families? Why is civil unrest growing while the wealth gap is larger than it ever has been in history? It's because this economy is not for us, it never has been since we've been around. It priced us out and left us behind before we got here. This doesn't end well for society at every socioeconomic level..

[@CCRob720]

debt life! Lets Go!

[@Alphadog1174]

I looked at that Graph and thought dam. I use Paypal 3 pay because its easy for to budget. Keep in mind I don't have to, It looks like a lot of people are using it for basic necessities

[@forestc6014]

The black swan rears it’s head.

[@invisiblesun6595]

Debt of any kind will keep you on that hamster wheel, be it college or credit card. No wonder most folks feel caught up in the Matrix.

[@Seanpfree]

This is a paid commercial

[@spaceballs44]

I’m happy that my spouse has retired recently from the Navy and between the 2 of us we get a good retirement package and with medical coverage. Our son when he graduates from high school we are adding him under my spouse’s credit card the navy federal one, he won’t be using it but it will start to give him a history. He already has a regular bank account and a job and since my spouse has his retirement and on 100% disability we’re giving him the GI Bill. I want him to have a good start.