It will surprise no one to say that driving is getting incredibly expensive. Much of the world is dependent on Russian oil and, when Western countries were forced to react to Russia's invasion of Ukraine and the ensuing humanitarian crisis, global gas prices were the first to soar.
While Wednesday's average price of $4.237 a gallon may be down from the $4.33 highs seen last week, it is still nearly double what it was last year. Many are, as a result, rightfully worried about the cost of their commute. A recent survey by Autoinsurance.com found that 90% of drivers in the U.S., UK and European Union were at least "slightly" concerned about being able to afford gas. Another 16% were "extremely" concerned.
Wait, I Can Finance That Gas Station Bill?
With a full tank of gas now averaging $80, the payment is becoming a significant expense for many. Not one to miss the chance for new customers, buy-now-pay-later companies like Zip and Klarna have promoted programs that allow users to split their gas bill into smaller payments.
Both fintech companies partner with major gas providers Chevron (CVX) - Get Free Report and Texaco — when drivers come up to the payment counter at their stations, they are presented with the option to split their gas bill into four payments over the course of six weeks.
While Klarna representatives told the Washington Post that the program is "not new and has no connection to the current global geopolitical situation," Twitter (TWTR) - Get Free Report users shared a recent notification telling users to "fill up at Chevron or Texaco."
What's The Danger Of Buy-Now-Pay-Later?
Between the pandemic and the rising cost of life, buy-now-pay-later programs have been seeing a major boost in users — they are often presented as a way to avoid the interest that comes with buying large purchases such as electronics on credit.
Critics of these programs, however, point out that "split it into payments!" deals have more and more often been popping up for smaller purchases like makeup, food and gas — when one struggles to pay for one's daily needs, split payments risk creating a financial hole in which a large chunk of future income goes toward past purchases.
"Even when people do pay the instalments, there's likely a higher number of people who are also at the same time racking up credit card debt," Melody Brue, principal analyst at Moor Insights & Strategy, told Protocol. "It's sort of ironic that some of these 'buy now, pay later' options are meant to be for people not tapping into credit, but they actually are."