Valuetainment - ＂No Excuse For IGNORANCE＂ - BNPL Debt EXPLODES To $20B Record High

00:00:00.000 Something that's happening that is not necessarily taxes, but it's really hurting a lot of different

00:00:05.260 people is this BNPL concept, buy now, pay later concept that is hurting a lot of people. This one

00:00:13.760 story I want to read to you, Rob, what page is that BNPL on? There it is. It's on page 11.

00:00:19.000 Americans just spent a record $20 billion with buy now, pay later. Here's what to do if you

00:00:28.080 overdid, overdid it yourself. Now I'll read this story. I'm going to give you the quick tips he gives

00:00:33.280 in the article. This is a market watch story. As 2026 gets underway, some consumers are facing

00:00:39.080 overwhelming debt. This is especially true for those who took out multiple buy now, pay later

00:00:45.000 loans to cover their holiday shop in a move known as stacking. And more people are using the loans

00:00:51.020 than ever before. Shoppers use the buy now, pay later spend a record $20 billion from November

00:00:57.820 1st to December 31st. According to Adobe 2025 holiday shopping trend reports, 9.8% increase

00:01:04.380 from 2024. BNPL typically comes in a form of pay in four loans that don't charge traditional interest.

00:01:12.000 Although the late fees can be charged if a payment is missed, lenders say the option expands access to

00:01:16.920 people who are underserved by traditional credit, but critics say it can lead to worrisome debt

00:01:22.820 accumulation. Tom, why is this so concerning? I know you have some charts on how late people are on

00:01:27.500 payments, but why is it so concerning to you? So you have to go and kind of go upstream a minute

00:01:34.260 and look at it. In the middle of the COVID crisis, I don't know if we have this chart,

00:01:38.860 the credit card debt in America reached $777 billion as people paid off a lot of it. And I think that was

00:01:48.800 right. Q2, there it is. Q2, 2021, we hit 777. The sharp drop down was because A, we weren't shopping.

00:01:59.200 We were locked in our homes. We had lockdowns and everything going. B, people took 1400, 1500,

00:02:05.500 $1,700 payments from the government, Pat, and paid down their credit cards. So all of a sudden, here we

00:02:10.560 are, Q1 to 2021, we are at $777 billion. That has gone up since we were all allowed to go back outside

00:02:20.100 and play. We're now at an all-time high of $1.26 billion as we have the first- Trillion dollars.

00:02:28.820 Trillion, $1.26 trillion as we are in the first week of 2026. So that's what's going on with credit

00:02:36.440 card debt. Tom, that's a scary sight, just looking at that. Correct. But now here's what happens.

00:02:41.860 Along comes BNPL. And BNPL isn't on your credit report. Well, it wasn't on your credit report.

00:02:48.500 Whenever you have your credit report run, the industry uses what's called FICO-8. That's how

00:02:54.740 they look at your credit report. And if you're paying LifeLock or somebody, they say, hey,

00:02:59.200 there's been an inquiry on your credit report. Boom. Meanwhile, over the same amount of time,

00:03:05.220 while America is maxing out its credit card, Pat, look what happens to growth of BNPL.

00:03:11.600 So people's credit cards were maxed out. This is number of users? Because I can barely read it.

00:03:16.360 It says number of users on the left, right? Correct. Okay. So this is basically the number

00:03:20.600 of users of BNPL shoots up like a rocket. At the same time, credit card debt is going up to $1.26 trillion

00:03:28.600 where it is today. And there was calls in Washington that says, hey, BNPL needs to be

00:03:35.260 put on people's credit reports because we want to kind of protect. Some consumers need to be

00:03:40.460 protected from themselves. And the only one, a firm said, okay, I will let you know what my pay in for

00:03:49.060 statistics are. Pay in four months. A firm agreed to do it. FICO created what's called the FICO score

00:03:56.140 10, which includes BNPL. A firm was good. Klarna and Afterpay said, no, we don't want to report it.

00:04:04.580 The reason they don't want to report it is because if there's a FICO score out there and there's a way

00:04:09.000 to regulate it, then all of a sudden people wouldn't use it. And Klarna and Afterpay wanted people to

00:04:14.720 keep using it. Well, what happens? Guess what? Credit cards are maxed. This isn't on your credit

00:04:21.400 report. You go into Best Buy. You want to buy that 4K TV for a thousand bucks. They'll say,

00:04:26.340 hey, just put on Klarna. Sign here. Do Klarna. Well, guess what? 63% of BNPL users over the last 24

00:04:34.920 months now have multiple BNPL accounts. Number one, 41% of BNPL users missed at least

00:04:44.300 one on-time payment last year. Did you say 41%? 41% of all BNPL users. This is not the youth.

00:04:51.540 This is anybody and everybody that uses BNPL. Everybody, everybody last year missed at least

00:04:54.940 one payment. Right. And it gets worse when we go to the youth. Gen Z, the reporting on Gen Z is

00:05:01.440 horrifying. 50% of Gen Z BNPL users missed one payment since holiday spending. That's three months

00:05:12.420 ago, November, December, January. In the last 90 days, 50% of Gen Z have missed one payment.

00:05:20.260 Now, there is a concept that when you miss a payment, doesn't it like the interest goes to

00:05:26.080 the roof or the fee is an extremely high fee? You miss a payment, it's wham-bam. And this thing

00:05:32.800 becomes, your foot is in the bear trap. Yeah, but what does that mean, wham-bam? I want to know

00:05:37.320 exactly what wham-bam means. My understanding is that suddenly you're on an equivalent of a 30%

00:05:42.660 a year interest. That's exactly what I was thinking about. So I was thinking, Rob, can you pull up on

00:05:46.840 ChatGBT, what happens to BNPLs when you miss the first payment? What happens to the results?

00:05:53.600 They'll say, oh, it's just 2% of balance, but you got to multiply that times 24.

00:05:57.480 Yeah, 12. It ends up being worse than credit cards if you miss a balance and they make it really

00:06:01.640 sneak. I remember we uncovered that before. You usually charge a late fee, okay? So at

00:06:08.160 Afterpay Klarna Zip, late fee kicks in quickly. After a few days, some cap total late fees per order.

00:06:15.200 Affirm no late fee. Your account is often frozen instantly. Block you from making new purchases.

00:06:20.200 Your credit profile may be impacted. Providers that report to credit bureaus,

00:06:24.780 in many cases, oh, they're now reporting. Klarna affirming.

00:06:28.440 Some plans they report. See, that affirm reports. Klarna is not reporting across the board and not

00:06:34.660 reporting to all agencies. So why don't they tell? Hey, if I'm Klarna, I don't really want this on the

00:06:41.620 credit report because I'm plan B. And I want people to take the risk on plan B of their own free will.

00:06:48.800 Yeah, it's a funny business model. Mark, where are you at with this?

00:06:53.100 Well, a couple of things. So first of all, when we look at the credit card debt going up,

00:06:56.600 we have to take into account consideration of the inflation. And not just the CPI inflation,

00:07:01.860 but the increase in the money supply. So I see here it's gone up by 9.87 or 9.8% since 2024.

00:07:07.900 BNPL use. So 9.8 since 2024. But the money supply has increased faster than that.

00:07:14.740 So when we look at sheer numbers, we have to take that into consideration, first of all.

00:07:18.880 But what I would say to this is it sort of kind of goes back to two things. Number one,

00:07:22.120 you referenced some of the news we're going to talk about. One, Trump capping rates. And so when

00:07:28.240 lending restrictions get tightened, people will turn to options like this. So you cut rates at 10%

00:07:33.480 on credit cards, people are going to go to loan sharks, number one. Number two, the way I think

00:07:37.520 about it is you also mentioned- They run out of credit balance.

00:07:39.680 What's that?

00:07:40.100 Or they run out of credit balance.

00:07:41.300 Or credit balance. But the other thing I would go back to, as you referenced earlier,

00:07:44.720 a new story to get to later is the education system and capitalism. And if people were taught

00:07:50.260 how to use debt in a good way, you mentioned good debt versus bad debt. And so we are in a

00:07:56.060 debt-based system. We're in a credit-based system. And so we use debt to grow. Donald Trump was the

00:08:00.340 king of debt before becoming the president. But if you don't learn how to use it properly,

00:08:04.660 it can become extremely dangerous. If you use it properly, it's extremely powerful. So I just see

00:08:10.480 a failure in the education system, first of all. I see a failure in the banking system and people are

00:08:16.300 turning to this. But overall, yeah, it can end up bad.

00:08:22.000 Brandon, what do you have with this?

00:08:23.040 You know, it's amazing how it's so much more difficult a lot of times to get something as

00:08:28.180 simple as a small business loan with a solid plan versus being able to have access to $20,000 to $50,000

00:08:34.500 worth of credit card debt to do frivolous shopping with. I mean, I never really thought of it like

00:08:39.740 that. But it's crazy. Like, it is a much more complicated process to take out a small business

00:08:45.040 loan than to get a few credit cards. But it's unfortunate. Like, I always complain about

00:08:50.820 government regulation. But now here, this is an example of what happens and why the government

00:08:56.540 sometimes has to get involved and protect people because of the, I guess, incompetence of some

00:09:01.940 people and the predatory nature of certain companies to put people in a situation like this.

00:09:07.380 Because, yeah, these are credit cards. They're loan sharks. They're probably more expensive than

00:09:12.600 paying off a credit card when you really boil it down. I remember the rates get up to like 50%

00:09:17.140 sometimes if you miss a few payments. So, yeah, it's a disaster.

00:09:21.240 But is it the government's job to protect people or are they smart enough to read the paperwork and

00:09:25.400 understand what they're signing?

00:09:26.340 I guess you could say that's survival of the fist to a degree.

00:09:29.700 But I agree with Mark. I agree with Mark. Please, Mark, finish your thought.

00:09:33.640 Because if they're not going to get this, they're not going to read the paperwork and they're not

00:09:37.080 going to read the fine print. That's on them. And if they don't get it there, the government

00:09:40.400 protects them from getting it. They'll go to the back alley and they're going to get it from the

00:09:43.500 loan shark and they're going to get their legs broken. So it's like they're going to take the

00:09:46.460 risk either way. At least it's disclosed and it's transparent. And like, again, it should be on

00:09:51.600 them to be smart enough to understand what they're signing. They can take that contract and run

00:09:55.200 through ChatGPT today. I mean, there is no excuse for the ignorance of that.

00:09:59.220 I agree with that. And I think that one of the good things of the Consumer Protection Bureau is

00:10:03.260 to ensure that there is fine print. But I think fine print needs to be regulated because there's

00:10:07.980 what's called plain talk fine print. And plain talk summaries, I believe in, where you have to

00:10:13.000 pat right there at the top, the plain talk summary, like when you get a car loan, plain talk, you're

00:10:17.540 getting this much loan. You will pay this much interest. The vehicle will ultimately cost this,

00:10:22.540 cost this, and this will be your payment for these many months. Boom. And here's your interest rate.

00:10:27.260 I believe in those plain talk summaries, but it should be on the consumer to read it.

00:10:32.140 But I like the fact that we force companies to, hey, put the plain talk at the top and

00:10:36.140 the consumer makes a choice. Make the decision for yourself. Yeah, I like that part. But Tom,

00:10:39.920 you know what's the weirdest thing I'm looking at? So Rob, can you do me a favor? Go on ChatGPT,

00:10:43.960 ask this question. What is the market cap of top BMPL companies the last five years? Okay. Now,

00:10:51.780 I want to know if they're going up or if they're going down because I want to know what patterns

00:10:55.580 will notice. To me, what it says here is a firm, which is one of them, they went public

00:11:02.360 since January of 2021. Look at this. January 2021, $28 billion is early 2021 peak. Look at 2022,

00:11:12.720 post-pandemic drop. It drops to $2.8 billion market cap. Nobody was shopping. Yeah, nobody was

00:11:19.600 shopping. Then it goes to $14.8 billion, then $20 billion, then $25 billion. It is still not back

00:11:24.720 up to the $28 billion it was when they went out in 2021. So then if you go a little bit lower,

00:11:32.200 that's a firm. Go to the next one. After pay 2025, block overall market cap has been reported around

00:11:39.940 $42 billion. Okay. Pre-2022 after pay market cap was initially $30 billion. Okay. So it's gone up

00:11:47.140 say 40%, right? Exactly 40% from $30 billion to $42 billion. Go a little bit lower. Klarna went from

00:11:54.400 $45 billion valuation in 2021. Peak, this is when they were private. 2022 is still private. They go to

00:12:03.280 $6.7 billion. IPO, 2025, $15.1 billion. And now it's roughly $11 to $12 billion. Now here's what this

00:12:13.120 makes me think about. Do I think this is something that's going to be around 20 years from now?

00:12:18.260 Maybe, maybe not. I don't know. And the reason why I'm asking this is, remember when everybody was

00:12:25.020 looking at how fast Groupon was blowing up and there was another company- Living Social.

00:12:29.920 Yeah. Living Social. Like Living Social. Tom, we even had a meeting one time in Woodland Hills,

00:12:35.300 California in 2011, 2012, that we were going to launch our own Groupon Living Social. Do you

00:12:41.780 remember the name of it? I mean, let me see if you remember the name of it. Do you remember the name

00:12:45.020 of it? If you remember the name of it, dinner's on me, Tom. I do not remember that. It was called

00:12:49.100 Goody Squad. Oh, Goody Squad. It's called Goody Squad. We had all these, you know, personalities and

00:12:55.140 this stuff. Remember I had this meeting. I brought all of you guys in. It was like a CEO of a

00:12:58.420 massive insurance company. Einstein, the little white dog. Yes. Yes. So we had this thing. We're

00:13:01.820 going to do Goody Squad and everybody's looking at me saying, yeah, I don't know about it. We never

00:13:05.420 ended up doing anything with it. But, but the point is, is this a Groupon, you know, hype that it's

00:13:12.580 coming out. It's going to be great. And then it's going to go away. I don't know. All I can tell you

00:13:16.260 is parents, wherever you are. Okay. Parents talk to your kids. They're going off to college.

00:13:23.500 They're 18 years old. They can apply to this stuff. It's horrible for them. Horrible. If you

00:13:29.460 can't afford to buy it, do not buy it. Sometimes the most basic principles are making a comeback.

00:13:34.440 Yeah. Look at this. This is Groupon. Look where Groupon was at at one point. What is that date,

00:13:39.420 Rob? November, 2011. Oh, that's the date. I just said 11, 2012, November to the guys on the cover of

00:13:46.240 Fortune Magazine, Forbes Magazine, everybody. He was offered for someone to buy his company for

00:13:53.300 $6 billion. He turned it down. Google offered it and they wanted the consumer data. Google

00:13:58.800 offered it to buy it $6 billion. What is the market cap of Groupon right there? Look at that.

00:14:03.180 Go back to that article. Go back to that article. 10 years ago, Groupon turned down Google $6 billion

00:14:08.120 offer. Here's what happened ever since. They have a nice little conference room now. Go a little

00:14:12.960 bit lower, Rob. Go a little bit lower. What happened to them since? Zoom in. I think it's

00:14:16.740 half a billion dollars right now, Pat. What is the market cap? The rejection came during

00:14:20.680 heady times for Groupon, which launched in 08 with a 2-4-1 pizza deal at Chicago Bar quickly

00:14:26.100 became Chicago's tech darling. By 2010, it had grown to 1,500 Chicago-area employees. Go a

00:14:33.000 little bit low, Rob. I want to know what the market cap of Groupon is today. What is the market

00:14:38.320 chart that you had up? What does it say, Mark? $654. $6 billion opportunity to $654. Rob, what is

00:14:48.580 their revenue? Just type their revenue. What is Groupon's 2025 revenue is what I care about. I want

00:14:55.480 to know actually what kind of numbers they're bringing in today. 2025 revenue. Can you do me a

00:15:04.480 favor, also run a poll? Still not a bad revenue, by the way. Half a billion. It's not bad revenue.

00:15:11.180 They're still pulling in a half a billion dollars. Can you do me a favor, Rob? Ask a question on,

00:15:15.580 run this poll. Who still, who has used Groupon in the last 12 months? Ask the question in a poll,

00:15:23.060 who has used Groupon? Has anybody here used Groupon last 12 months? Have you used Groupon? Mike,

00:15:29.900 have you touched Groupon? You have. Where was it at? Massage partner used Groupon. Wow. Okay. Well,

00:15:37.180 I guess that makes sense. By the way, this is brought to you by that massage partner. We're

00:15:42.900 going to put the link to their website. I know my wife used to use it all the time,

00:15:46.860 and I never hear her talking about it anymore. I know a lot of people used it. And I think what I,

00:15:51.040 what I've heard is the retailers really found out that it wasn't really a way to get good long-term

00:15:55.260 business. So they were selling all the lost leaders, but then they never recouped the

00:15:58.980 difference of the lost leaders. The business owner, the business owner. So I think the appetite

00:16:02.500 went down from the business owners. And I think that was a big drawdown on that. So it benefited

00:16:07.320 the customer, but it didn't benefit the business owner. But even from the customer, they didn't

00:16:11.440 really establish relationships with the retail establishment. So for example, they went to the

00:16:15.480 massage parlor or whatever, they went to get the Botox, but they would just chase the best deal

00:16:19.960 and they wouldn't actually develop a relationship with that provider. And so I don't think either party

00:16:25.440 really benefited, it didn't turn into a long-term plan. But back to the BNPL, I think it will have

00:16:31.080 staying power because people are always going to need to borrow money. That's my worry.

00:16:34.400 The need to borrow money will always be, there's always going to be people who have money that want

00:16:38.260 to loan it. And there's always going to be people that need to borrow it. I think you're right. I hate

00:16:42.060 to say it, but I think you're right. But I think it's going to mess a lot of people up. For those of

00:16:47.940 you that run small businesses, this is one thing that most people are not aware of. We run a consulting firm,

00:16:54.020 ourself called Bed David Consulting, where we do engagements with around 10,000 businesses from

00:16:58.740 60 plus countries around the world. And this is 75% of our business. It's one of the best kept

00:17:05.120 secrets we have in our company that no one knows about. If you come to our office and you see

00:17:08.920 how we grew nine employees just a couple of years ago to now 165 full-time employees.

00:17:14.800 And if you go downstairs and where Bed David Consulting is at, the energy there is electrifying.

00:17:19.780 If you're a small business owner yourself, anywhere between 10 million plus half a billion

00:17:26.100 dollar revenue. If you're on that range and you want to find a way to get strategies because each

00:17:30.900 phase of a company goes through five phases and each phase you have five challenges you face.

00:17:36.920 If you want to know what those things are, go to beddavid.com all the way to the bottom, fill out the

00:17:42.740 information. We'll give you that 18 minute breakdown of what those five by five are. And then if there's a

00:17:47.840 way we can help you take your business to the next level, whether you're raising capital, whether

00:17:51.640 you have a compensation plan that needs to be readjusted. We just had the most incredible

00:17:55.920 meeting last week with our firm on Tuesday and on Thursday, whether it's comp, whether it's LTIP,

00:18:01.780 equity, whether it's expanding in a new market, regulation, marketing, podcast, different ways of

00:18:07.460 getting your story out there. You want to learn more about how we can help you out. Go to beddavid.com,

00:18:12.140 fill out your information. One of our consultants at the firm will get ahold of you.

00:18:16.260 If you enjoyed this video, you want to watch more videos like this, click here. And if you

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Valuetainment - January 15, 2026

＂No Excuse For IGNORANCE＂ - BNPL Debt EXPLODES To $20B Record High

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