The personal finance industrial complex has discovered a new emergency. People are using Buy Now Pay Later services to cover their bills. This is apparently worse than using credit cards to cover bills. Or payday loans. Or just not paying bills at all.
The solution offered is breathtaking in its insight. Try a payment plan first. Revolutionary. Nobody thought to ask the electric company for more time before downloading Klarna.
Here's what actually happened. Someone at a financial advice mill needed content. They looked at BNPL statistics. They saw people are broke. They combined these observations into a headline. They suggested alternatives that require the same thing BNPL requires: approval from someone who wants their money back.
Balance transfer cards. Personal loans. Payment plans. All of these demand you convince a lender you're worth the risk. If you qualified for a 0% balance transfer card, you wouldn't be splitting your electric bill into four installments. You'd be using that balance transfer card to buy things you don't need like a normal person.
The article treats BNPL like a character flaw. A spending problem. But using BNPL for bills isn't shopping addiction. It's arithmetic. The power company wants $200. You have $50. Klarna offers a bridge. You take it because the alternative is sitting in the dark practicing your budgeting skills by candlelight.
The advice to try a payment plan first assumes the utility company is more generous than a fintech app. Bold assumption. Most of these companies charge reconnection fees that cost more than the BNPL interest anyway.
The real issue is that personal finance content assumes everyone is one smart decision away from solvency. Just try this one neat trick. But people using BNPL for their electric bill aren't missing a trick. They're missing money. No amount of articles will fix that.
Photo by Abhinav Arya on Unsplash
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