An analysis of Frich, a social finance app for Gen Z, reveals a concerning trend as the holiday season approaches. In the second week of December, dubbed 'Klarna Week,' the usage of buy now, pay later (BNPL) services is expected to peak, with a staggering 31% increase compared to 2023. This surge in BNPL spending comes amid rising debt levels and heightened stress about affording holiday shopping, with 52% of Gen Z feeling more anxious this year than last. Credit card usage has also surged, with payments rising by 49% and late fees increasing by 14%. To cope with inflation, many Gen Z shoppers are resorting to purchasing cheaper alternatives or 'dupes,' with over half admitting to buying fake luxury items. Despite the uptick in BNPL services, only 12% of users openly acknowledge their regular use, highlighting a disconnect between behavior and self-perception. Frich's CEO warns against developing unsustainable financial habits during this financially stressful season.
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