Why Millennials are Running Toward Installment Payment Options
Debt is a serious 4-letter word. Am I right? Shoppers, especially millennials, are still scarred from the economic crisis that hit us back in 2008. Talk about some serious PTSD. That was over a decade ago and we are all still cringing.
In 2009 and 2010 lenders were a lot less willing to offer loans to anyone other than those with the best existing credit. So, it turned into a Catch-22 situation for young adults. No credit if your score was too low, and no way to build up your score without credit. Awesome.
Well, these tech-savvy millennials figured out how to get personal loans to help establish their financial selves, opening more than twice as many personal loans as Generation X did at the same age, according to a 2017 TransUnion study. But loans are still not the answer. Not in today’s world.
Just consider the numbers in the U.S. alone. According to the New York Federal Reserve, there is $1.26 trillion (yes…that’s trillion with a “tr”) in student loan debt in the U.S. spread over 43 million borrowers. The average American has about $38,000 in personal debt. That doesn’t include mortgages. This is the reality.
So the fintech world said ‘why should we just accept this?’ The way forward is definitely not through bank loans and digging further into debt. We want control over our own finances and we definitely don’t want to constantly be looking over our shoulder for the fine print to bite us with fees and interest.
As we know, our world is ever changing and it is headed quite rapidly toward “consumer based loans,” aka a fancy way of saying you are providing yourself with your own loan.
Installment Consumption on the Rise
Consider for a moment what you see happening in the market right now. You can “Rent the Runway,” where you can have anything you want to wear without actually buying anything. You can “Rent to Own” furniture, computers, appliances, electronics and even smartphones via Rent-A-Center. In other words, you can use an installment payment option for things you need now, but can’t necessarily afford now. Even Amazon offers installment payment options for select items.
This ball is rolling and it’s not stopping anytime soon.
Splitit (the only global installment payment solution provider), saw where we were headed, which is why they decided to jump head first into finding a real solution for today’s financial reality. They have been partnering with key retailers all over the world – the ones who are innovative leaders and saw the real potential that Splitit services could provide their customers. Partners like Kogan, James Allen, and Glasses USA.
Companies like these are now able to offer their customers the ability to pay for items in smaller monthly installments using Splitit’s monthly installment payment option that is 100% interest-free and with zero fees from your own existing credit card…not from a third party lender!
This gives us as shoppers instant access to products and services that are higher quality and are perhaps too expensive to buy outright. Like a new sofa, for example. Mine has been killing my back, making Netflix binges a little less relaxing.
And once you shop using Splitit, you won’t want to pay any other way
Think about it. You want to buy a sofa (since I have sofas on my mind…), and the one you have your eye on costs $500 (just to keep it simple). If I am able to get that sofa now, and only pay $100 now, I am most likely going to buy it! Using Splitit to purchase said sofa would mean paying $100 each month over the next 4 months (after the initial $100 payment), with no extra fees or interest, plus I get my credit card rewards AND will continue to build my credit score since I am using my existing credit card. It’s a win-win-win for me. And I can Netflix in true comfort once more…
The future, as I stated before, does not lie with banks for everyday credit loans. As consumers we need to take financial control back into our own hands. I relish the idea of having access to the things that I want (and need) with the ability to manage it all myself.