It's finals week at the University of California, Los Angeles.
Junior poli-sci major Akunnia Akubuilo took time away from studying to show Newsy the app she says she uses to make most of her online purchases — Klarna.
"I've gotten a lot of stuff for my dorm, actually, like my mini fridge, which was around like $200, I bought with Klarna," she said. "I got LSAT prep books because I'm planning to take the LSAT in April."
Using apps to buy stuff is nothing new. At UCLA, you can use your phone to get an autonomous robot to deliver pizza.
But Klarna is one of a number of buy now, pay later apps, which are booming in popularity, particularly with young people.
The apps allow you to purchase items — online or in store — and pay for them, interest free, in weekly or monthly installments.
"You open the app and you can immediately see your purchase power," Akubuilo said.
But what they often don't see is how fast, across multiple apps, their debt is accruing.
Gen Z is turning to buy now, pay later more than their older counterparts.
This year, nearly two out of three 18-24-year-olds said they used these apps. Last year, it was closer to one in three.
"I noticed over the summer and this early fall, it became a lot more like available, especially when it comes to stores or more like important purchases. I was looking on Expedia and now Expedia takes Klarna," Akubuilo said.
In November, a Congressional task force on financial technology held hearings that focused on the promise and peril of these emerging products.
"The exponential growth of these alternative financial products clearly shows that consumers want them," Rep. Warren Davidson said.
The association representing these apps says they're helping people avoid high-interest credit card debt and payday loans, which carry costly finance charges.
"They're using these products because it gives them a certainty. They know exactly when the payments are due," Financial Technology Association CEO Penny Lee said. "So it gives them that consistency in being able to budget better within their own means."
But consumer protection advocates are concerned that buy now, pay later products are innovative debt traps. Lauren Saunders is the associate director of the National Consumer Law Center.
"Refunds may be difficult to obtain," she said. "Multiple loans can be difficult to manage and can lead to unaffordable debt loads. Abusive profit models may be built on late fees from struggling consumers."
"A lot of the time you're broke and you want to buy stuff," Akubuilo said. "It can kind of encourage you to live beyond your means, like, you know, sometimes you can't help yourself. I know I can't. I love shopping, so I just love using Klarna and just hope and pray that I have the money to pay for it later."
Credit Karma recently found that more than half of the Gen Z and Millennial users say they've missed at least one payment. And that can lead to penalties as high as 25%.
"Let's say you don't have enough money to balance your account, and the payment fails, then you have to pay a late fee," Akubuilo said. "It's really tragic. Like sometimes the late fee is like equal to as much as like one of the payments that you might have to do."
You can be using several buy now, pay later apps at the same time though, which means you can have a number of payments due.
"I've experienced that," Akubuilo said. "It'll be like one text that will be like, 'Oh, you've got a payment of $12 coming up.' Then the next day it'll be like, 'Oh, $16.'"
Newsy spoke with the California Department of Financial Protection and Innovation's senior counsel Adam Wright about potential consequences using these apps.
"There are definitely concerns that folks are stacking these products and taking out more than they're able to repay when they get these products," Wright said. "Under many of these products, what you're doing is you are authorizing in advance payments that come out of your account. Right? And if the providers are not doing anything to make sure that consumers are actually able to afford them, then you could have the possibility that by buying something online, you're going to cause their payment to come out your account before you need to, let's say, pay rent."
California is the first state in the country to regulate buy now, play later. It requires the companies to get licensed as loan providers.
"Prior to our doing this, in California — and in many states — these products were not being regulated at all. They had been structured in a way that avoided any regulation by our agency or federal agencies," Wright said. "The problem is, is that no one's checking to make sure that the companies are doing what they're supposed to. No one's checking to make sure that they're responding to consumer complaints whenever they come in, and no one's really watching the back of the consumers."
National regulation specific to buy now, pay later apps appears nowhere in sight.
"Until we gather a strong understanding of these products and how they are used, we should refrain from implementing over-burdensome regulations that would impede consumers from receiving the benefits that the programs bring," Davidson said.
But Akubuilo says it's a good thing these apps exist.
"I say definitely," she said. "Take them with a grain of salt because sometimes it can feel like a video game or like the sims — where it's like you're spending fake money. But no, it's real money."
Real money that's adding to the debt burden taken on, in many cases, by people who owe a lot already.