Rental relief comes with a steep price tag as 'rent now, pay later' services gain popularity among struggling renters. The financial burden of housing costs has become increasingly unbearable for millions of Americans, prompting them to seek alternative solutions.
Renters are turning to companies like Flex and Livble that promise to ease their financial strain by breaking down rent into smaller, more manageable payments. These "rent now, pay later" services collect fees on top of the rent, which can quickly add up. Kellen Johnson, a 44-year-old former Amazon delivery driver, is one such user who started using Flex two years ago.
Johnson initially saw this as an expense he could afford to incur, given his unpredictable income. However, upon closer inspection, his monthly charges for the service exceed $33, including a hefty subscription fee and interest rate that translates to 172% effective annual interest rate.
Consumer advocates warn that these products function much like short-term loans, layering fees onto already strained budgets and often carrying triple-digit effective interest rates. Mike Pierce, executive director of Protect Borrowers, cautions consumers to be skeptical of any financing providers that have partnered with landlords or promise no fees or no interest.
While companies like Flex claim to help lower-income renters manage cash flow, economists argue that these services do not address the fundamental issue of affordability in the rental market. As more tenants opt for flexible rent payment options, there is a growing concern that rents could rise further as landlords factor in potential weekly cash flows from their customers.
Meanwhile, buy now, pay later companies like Affirm are piloting programs allowing some customers to split rent into two payments, while landlords are increasingly accepting credit cards for rent payments. However, paying rent by credit card can also be costly, with fees ranging from 2.5% to 3.5% of the rent.
The industry's impact on renters' finances raises concerns about the sustainability and fairness of these services. As one economist noted, "If credit cards become more widely used for rent payments, it could lead to a new market dynamic where landlords start factoring in potential weekly cash flows, rather than just the rental market rate."
Renters are turning to companies like Flex and Livble that promise to ease their financial strain by breaking down rent into smaller, more manageable payments. These "rent now, pay later" services collect fees on top of the rent, which can quickly add up. Kellen Johnson, a 44-year-old former Amazon delivery driver, is one such user who started using Flex two years ago.
Johnson initially saw this as an expense he could afford to incur, given his unpredictable income. However, upon closer inspection, his monthly charges for the service exceed $33, including a hefty subscription fee and interest rate that translates to 172% effective annual interest rate.
Consumer advocates warn that these products function much like short-term loans, layering fees onto already strained budgets and often carrying triple-digit effective interest rates. Mike Pierce, executive director of Protect Borrowers, cautions consumers to be skeptical of any financing providers that have partnered with landlords or promise no fees or no interest.
While companies like Flex claim to help lower-income renters manage cash flow, economists argue that these services do not address the fundamental issue of affordability in the rental market. As more tenants opt for flexible rent payment options, there is a growing concern that rents could rise further as landlords factor in potential weekly cash flows from their customers.
Meanwhile, buy now, pay later companies like Affirm are piloting programs allowing some customers to split rent into two payments, while landlords are increasingly accepting credit cards for rent payments. However, paying rent by credit card can also be costly, with fees ranging from 2.5% to 3.5% of the rent.
The industry's impact on renters' finances raises concerns about the sustainability and fairness of these services. As one economist noted, "If credit cards become more widely used for rent payments, it could lead to a new market dynamic where landlords start factoring in potential weekly cash flows, rather than just the rental market rate."
. Like, who needs affordable housing when you can have "rent now, pay later" services that'll probably bankrupt you? 
It's not like these companies are making a killing off of desperate renters or anything... but hey, at least they're providing an option for people to pretend their financial struggles aren't real 
. And let's be real, who needs a 172% interest rate on top of their monthly rent? Sounds like a solid plan to get back on your feet 
.
It's not just the fees that add up quickly, it's the fact that these services are essentially loans with no clear end date or payoff plan. And the worst part is that consumers are getting sucked in because they think its a way to manage their finances, but really its just kicking the can down the road.
. Maybe one day we'll have a system that balances both peoples interests, you know?
They might seem like a helping hand, but honestly, it's like putting a Band-Aid on a bullet wound. People are already struggling to make ends meet, and taking on more debt just seems like throwing them under the bus. 
It's like they're charging you for breathing. And what about when the 'help' runs out? How many people are gonna default on these payments and end up in a worse spot than before? 
It feels like we're just patching over the cracks instead of fixing the bigger problem: affordable housing. 
And what about the fees? Are they really that transparent? We need to rethink how we're approaching this whole housing crisis. Is it just about making rent more manageable or is it about addressing the root cause of why people can't afford rent in the first place? 
and they charge like 10% interest lol how am i supposed to explain that to her parents? anyway back to this rent now pay later stuff... its like how i used to put off grocery shopping until the last minute and just live on energy drinks 
then again, those companies r making bank off people who cant afford rent 
i feel bad for kellen johnson tho, paying 172% interest is crazy! what do u think about these services? are they really helping or just delaying the inevitable?
oh man i cant believe what's happening to these ppl struggling to make ends meet 
i mean what even is 172% effective annual interest rate 
and i feel like were just gonna see more and more landlords trying to squeeze those struggling renters for every last penny 
. And what really gets me is that these services are often tied to landlords, so they're basically profiting off people who can't afford rent 
. It's like a never-ending cycle of debt and I don’t think it's a sustainable solution at all 
.
. I wish there was a better solution than these 'rent now, pay later' services... maybe something that actually helps renters afford housing without taking advantage of them 
, people gotta be so careful with these 'rent now, pay later' services 
. First off, those fees can add up super fast 
.
. But did you know that these 'rent now, pay later' services have an average APR of 123% 
? That's like borrowing money at an interest rate of 12 times the original amount! 
. In 2023, the total value of 'buy now, pay later' transactions was over $150 billion 
.
️. We need to keep an eye on this and make sure we're not creating a system that benefits the companies, but not the renters 
.