Pay-later means the young shop until they drop
MYSTERIOUS announcements used to appear in my local paper years ago.
They read something like: “John Smith, of 292 Wakefield Road, is no longer responsible for the debts of his wife, Mary.”
It was sometimes the other way round, and they were of doubtful legal validity.
But they spoke to a common working-class dread of debt. Owing money, to shops, to the landlord, to the tally-man for his doorstep loans, was feared.
It was also a social shame, among people who prided themselves on making ends meet. My mother was happy if she had threepence left in her purse at the end of the week.
It’s not like that now. Easy borrowing has put an entire generation in hock to the money-lenders, and pandemic has exacerbated the credit crunch.
‘Buy Now – Pay Later’ payment schemes such as Klarna attract young people, which has seven million customers with an average age of 33. But one in five using such schemes confess they will be unable to meet repayments without borrowing more money. They’re in a downward spiral of debt.
Why do they do it? Because they can. It’s so easy to buy stuff online without thinking of the consequences. Yet this spending spree takes place against a grim backdrop of rising unemployment and state support for jobs that will end soon.
The Government is alarmed. Treasury Minister John Glen this week promised laws to regulate the pay-later industry, via the Financial Conduct Authority, so that people “are only offered agreements they can afford”.
It’s too little, and too late, as usual. Shopping habits have changed for good, and when the Covid wolf is at the door, retail therapy is the feel-good that some people need.
And where there is need, there are always greedy money men to take advantage of it.
One in five say they will need to borrow more money to meet repayments