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Between rising prices and dwindling job growth, using “buy now, pay later” on everything from concert tickets to fast food deliveries is becoming increasingly appealing. But greater use could also mean greater trouble, as more people fall behind on repaying these loans.Buy now, pay later loans gained popularity during the pandemic, especially among young people. While these loans can help you make large purchases without paying interest or undergoing a hard inquiry in your credit report, they can also easily be overused.About 4 in 10 Americans under the age of 45 say they’ve used “buy now, pay later” services when spending on entertainment or restaurant meals, or when paying for essentials like groceries or medical care, according to a poll from The Associated Press-NORC Center for Public Affairs Research.Buy now, pay later loans were not previously reported to the three major credit reporting bureaus. But consumers will soon see the impact of buy now, pay later loans on their FICO credit scores.Whether you’re a first-time or recurring user of buy now, pay later plans, here are some expert recommendations to use this tool responsibly. Focus on needs vs. wants Buy now, pay later plans divide purchases in monthly installments, typically in four payments. These loans are marketed as having low or no interest. Klarna, Afterpay, PayPal and Affirm are among the most popular buy now, pay later companies.These loans should ideally be used for large purchases or necessities, said Lauren Bringle, Accredited Financial Counselor at Self Financial.Bringle recommends asking yourself these questions before purchasing: Can I survive without this purchase right now? Do I need it for work, school, or a basic household need?Buy now, pay later is best used when you have a plan for the purchase, not for impulse buys. For example, when you need to buy a computer for school or a new refrigerator for your house, recommended Tyler Horn, head of planning at Origin, a budgeting app. Pause before purchasing Before deciding to take out a buy now, pay later loan, it’s a good idea to pause and consider if it’s the best financial decision for you, recommended Erika Rasure, Chief Financial Wellness advisor for Beyond Finance.Buy now, pay later plans can be positive budgeting tools when used strategically. However, it’s essential you know your spending behaviors before using them, said Rasure. If you’re an emotional spender, it might be hard for you to moderate your use of this tool and you could end up adding to your financial stress.“Buy now, pay later can become a coping mechanism rather than a financial tool that can get you a good deal or improve your cash flow,” said Rasure.If you have other payments due, such as credit card or student loan payments, consider how a buy now, pay later loan will add to your monthly payments, recommended Sarah Rathner, Senior Writer for NerdWallet. Read the fine print Like credit cards, each buy now, pay later loan has terms and conditions that can vary by purchase and providers. It’s crucial that you know what you’re agreeing to before you sign up, recommended Michael Savino, Chief Lending Officer at Municipal Credit Union.“Always read the fine print. Understand fees, repayment schedules, and what happens if you miss a payment or go into default,” said Savino.In general, if you miss a buy now, pay later payment, you can face fees, interest, or the possibility of being banned from using the services in the future. Avoid stacking BNPL loans You can easily run into difficulty keeping up with the cost and schedule of your repayments if you’re trying to simultaneously pay off two, three or more loans, Savino said.“Juggling multiple plans creates a blind spot and overall debt load, and multiple repayment dates are hard to manage,” Savino said. “So more loans makes it more difficult to budget.”The best approach: Stay mindful of your overall spending, and limit the number of buy now, pay later loans. Keep track of your loan(s) Whether or not you’re paying for multiple buy now, pay later purchases at once, you want to be aware of where your money is going at any given time, recommended Courtney Alev, consumer advocate at Credit Karma.“Buy now, pay later often requires automatic payments, so you want to make sure that your account is funded so that those payments are processing successfully,” recommended Jennifer Seitz, director of education at Greenlight, a financial literacy app for families.There are many ways to track your loan payments from setting a reminder on your calendar, to creating an intricate excel spreadsheet or tracking them on an app, said Jesse Mecham, founder of the budgeting app YNAB.Finding the best method that works for you will help you stay on track and avoid late fees. Make buy now, pay later work for you For shoppers with low credit scores or no credit history, buy now, pay later loans can seem like the best, if not the only, loan option. If used moderately and responsibly, these short-term loans can be a positive lending exercise, said Savino.“It allows you to to establish a baseline (and) get access to other affordable credit options that you can leverage that will ultimately provide financial wellness,” he added.Still, NerdWallet’s Rathner emphasized that shoppers using these tools always remember that buy now, pay later is a form of borrowing money.“It just kind of feels like you’re given a little extra time to pay back,” Rathner said. “But the reality is, if you miss payments, it can hurt your credit, much like missing payments with any other loan.”The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism. Adriana Morga and Luena Rodriguez-Feo Vileira, Associated Press
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E-Commerce
Claires, the fashion and accessories retailer that has been a staple of American malls for decades, has filed for Chapter 11 bankruptcy protection for a second time. The retail chain, aimed at the teen and tween market, has been struggling with the same headwinds faced by many brick-and-mortar businesses, including the broader shift to online shopping, increased competition, rising prices, and an unsustainable debt load. In a press release on Wednesday, parent company Claire’s Holdings LLC said it will use the Chapter 11 process to “maximize the value” of its business. That includes exploring a potential sale. “We remain in active discussions with potential strategic and financial partners and are committed to completing our review of strategic alternatives,” Claire’s CEO Chris Cramer said in a statement. Which Claire’s stores are closing? While Claire’s said its North American stores will remain open as part of the Chapter 11 process, it’s likely that many will not survive as the company reviews its physical footprint and assesses which locations may be underperforming. In fact, in a bankruptcy court filing, Claire’s says it has already reviewed its lease portfolio and decided that some stores “should be exited.” The filing identifies 18 locations across numerous states that will almost certainly begin store closing sales soon, if they haven’t already: Market Street at Lynnfield Claire’s Lynnfield Massachusetts Woodinville Plaza Claire’s Woodinville Washington Galleria at Tyler-ICG Icing Riverside California Provo Town Center Claire’s Provo Utah Newpark Mall Claire’s Newark California Shops at Highland Village Claire’s Highland Village Texas Mall of Abilene (ICG) Icing Abilene Texas 8456 Greece Ridge (ICG) Icing Rochester New York Pinnacle at Turkey Creek Claire’s Knoxville Tennessee Union Town Mall Claire’s UnionTown Pennsylvania Ford City Mall Claire’s Chicago Illinois Northtown Mall Claire’s Blaine Minnesota Bay City Town Center Claire’s Bay City Michigan Eastdale Mall Claire’s Montgomery Alabama Junction Commons Claire’s Park City Utah University Orem (ICG) Icing Orem Utah Woodland Mall (ICG) Icing Grand Rapids Michigan Livingston Mall Claire’s Livingston New Jersey Closing sales were expected to begin as early as July 25 and conclude no later than September 7. Claire’s says it has retained Hilco Merchant Resources to act as its liquidation agent to facilitate the store closings. The filing also identifies additional stores that are expected to be added to the closing list as part of Claire’s agreement. The list includes 1,326 locations that could be closed by October 31 unless Claire’s is unable to find a buyer. Reached for comment, a spokesperson for Claire’s referred Fast Company to Wednesday’s press release but did not comment on a more specific timeline for store closures or whether additional stores will be added to the list. This story is developing…
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E-Commerce
In China, wait times for U.S. visa interviews are so long that some students have given up. Universities in Hong Kong are fielding transfer inquiries from foreign students in the U.S., and international applications for British undergraduate programs have surged.President Donald Trump’s administration has been pressuring U.S. colleges to reduce their dependence on international enrollment while adding new layers of scrutiny for foreign students as part of its crackdown on immigration.The U.S. government has sought to deport foreign students for participating in pro-Palestinian activism. In the spring, it abruptly revoked the legal status of thousands of international students, including some whose only brush with law enforcement was a traffic ticket. After reversing course, the government paused new appointments for student visas while rolling out a process for screening applicants’ social media accounts.The U.S. remains the first choice for many international students, but institutions elsewhere are recognizing opportunity in the upheaval, and applicants are considering destinations they might have otherwise overlooked. The impact on U.S. universities and the nation’s economy may be significant.New international enrollment in the U.S. could drop by 30% to 40% this fall, according to an analysis of visa and enrollment data by NAFSA, an agency that promotes international education.That would deprive the U.S. economy of $7 billion in spending, according to the analysis. Many international students pay full price, so their absence would also hurt college budgets. Britain stands to gain as the US takes ‘a massive hit’ As the second most popular destination for international students, Britain is positioned to benefit.The country’s new Labour government has vowed to cut migration, and officials have imposed time limits on post-study visas allowing graduates to stay and work. But admissions consultants say the United Kingdom is still seen as the most welcoming of the traditional “big four” English-speaking destinations in higher education the U.S., U.K., Canada and Australia.After declining last year, the number of international applications for undergraduate study in the U.K. this fall grew by 2.2%, official figures show. A record number of applications came from China, up 10% compared with the previous year. Applications from the U.S. also reached nearly 8,000 students an increase of 14% and a 20-year high.Acceptances of international students for graduate programs in the U.K. grew an estimated 10% from last year, driven by demand for business and management courses in particular, according to data from UniQuest, which works with many British universities on admissions.Data showing the extent of any impact will not be available until fall, said Mike Henniger, CEO of Illume Student Advisory Services, a consultancy that works with colleges in the U.S., Canada and Europe. “But the American brand has taken a massive hit, and the U.K. is the one that is benefiting,” he said. Staying in Asia is becoming more popular Demand from Chinese students has risen rapidly for universities places in Hong Kong, Singapore and Malaysia, said Will Kwong, managing director of AAS Education, a consultancy in Hong Kong. Many Western universities have offshore campuses there that are more affordable than going to the U.S. or U.K.“Opting for study in Asia has been a trend since the easing of COVID-19,” Kwong said. “But obviously it’s been exacerbated by the change of administration in the U.S.”Some Asian families have told him the U.S. is no longer their clear first choice because of political turbulence and visa difficulties, many are still waiting for U.S. visa interviews and will likely miss the start of the fall term, Kwong said.Chinese college student Alisa, who is studying data science, plans to attend an exchange program this fall at the University of California, Berkeley. She hopes to pursue a master’s degree in the U.S.But she is also looking into other options “just so I could still go to school if the extreme scenario occurs,” said Alisa, who spoke on condition of partial anonymity out of fear of being targeted.Hong Kong will welcome any students who are denied entry to the U.S., the city’s leader John Lee has said. Last year, the Chinese territory decided to allow international students to work part-time.Hong Kong University said it has received over 500 inquiries from students in the U.S. and is processing around 200 applications for transfer. At another school, the Hong Kong University of Science and Technology, international undergraduate applications have surged by 40% from last year, said Alison Lloyd, associate provost on institutional data and research. Upheaval could be a boon for countries with satellite campuses Countries including the United Arab Emirates have invested heavily in attracting international students by partnering with universities elsewhere to host branch campuses. These arrangements could appeal to students who fear being denied access to the U.S.Dubai, which has designs on becoming a global education hub, hosts dozens of international institutions’ satellite campuses. It saw international student numbers grow by a third in 2024-2025.Lisa Johnson, principal of Dubai’s private American Academy for Girls, said her mostly Emirati student body is increasingly looking away from the U.S. for college.“Every student wants and dreams to go to Harvard,” she said. “But as college options increase in the United Arab Emirates, more and more students are staying.”Kazakhstan has similar ambitions, said Daniel Palm, who has helped U.S. universities set up campuses abroad. Illinois Tech and the University of Arizona are among colleges offering degree programs in the Central Asian country, drawing students mostly from China and Russia.“All of a sudden U.S. colleges are asking how to provide diversity, provide access,” Palm said, “because you have students who want to come to the U.S. and can’t.” Associated Press writers Kanis Leung in Hong Kong; Albee Zhang in Washington, D.C.; and Gabe Levin in Dubai contributed. Sylvia Hui, Associated Press
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E-Commerce
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