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Walmart’s New Payment Method: A Gateway to Phantom Debt?



Clear Facts

  • Walmart has introduced a new payment method at its self-checkout registers, allowing customers to borrow up to $4,000 instantly.
  • Financial experts are cautioning consumers about the risks of using buy now, pay later services like Affirm and Klarna, as they could lead to an increase in ‘phantom debt’.
  • While these services are not currently reported to major credit reporting agencies, credit card debt in the US is at a ten-year high, with an average balance of over $6,000 and a national debt of $1.08 trillion.

Walmart shoppers are being warned about the potential risks of falling into debt due to a new payment method. The retail giant recently added a payment option to its self-checkout registers, which allows customers to borrow up to $4,000 on the spot. This new method is gaining popularity, but financial experts are cautioning consumers about the potential pitfalls.

Buy now, pay later services like Affirm and Klarna are considered alternatives to credit cards. They allow shoppers to break down the cost of their purchases into interest-free repayments. However, experts are warning that this new way to borrow money could be pushing Americans further into debt.

Walmart added the option to pay with Affirm at its self-checkout registers in December 2023. Tim Quinlan, a senior economist at Wells Fargo, expressed concerns about the growth of this ‘phantom debt’, stating, “Because no central repository exists for monitoring it, growth of this ‘phantom debt’ could imply total household debt levels are actually higher than traditional measures.”

Not only experts but also social media users have expressed their concerns about these services. When Walmart added Affirm to the self-checkout last year, one user questioned, “What will be the outcome of giving millions of consumers the option to finance virtually all of their wants?” Another posted, “Affirm about to rip people off. Shame.”

Despite the criticism, Walmart defended the new payment option in a press release, stating, “As is always true with Affirm, customers are shown the total cost of their purchase and will never pay more than they agree to upfront. Affirm never charges any late or hidden fees.”

However, it remains unclear how much debt has been accumulated through these payment methods as buy now, pay later loans are not currently reported to major credit reporting agencies. Meanwhile, credit card debt in the US has reached a ten-year high, according to TransUnion, with the average balance now more than $6,000 and a national debt of $1.08 trillion.

Affirm and Klarna argue that their loans are better for consumers.

A spokesperson for Affirm told The U. S. Sun, “Affirm empowers consumers with a transparent and flexible way to pay over time. We underwrite every transaction individually and only approve consumers for what we believe they are willing and able to repay. Because we do not charge any late or hidden fees, our success is aligned with consumers successfully managing their finances.”

In the meantime, some Walmart shoppers are advocating for the store to adopt a controversial new idea being tested at Target. There are also six changes on their way at Costco, including a membership price increase.


Clear Thoughts (op-ed)

Walmart’s new payment method, allowing customers to borrow up to $4,000 instantly, is a dangerous step towards promoting financial irresponsibility. It’s a classic case of a corporation prioritizing profit over the welfare of its customers.

‘Buy now, pay later’ services like Affirm and Klarna might seem like convenient alternatives to credit cards, but they are potential traps leading to an increase in ‘phantom debt.’ This unreported debt could potentially push American households into deeper financial crisis.

The idea of enabling millions of consumers to finance their whims instantly is alarming. It’s a short-term solution that could lead to long-term problems, fostering a culture of instant gratification without considering the financial repercussions.

While Walmart defends this new option, stating that customers will never pay more than what they agree to upfront, the reality remains that these services are not currently reported to major credit agencies. The potential for unseen debt is vast and troubling.

In a time when US credit card debt is at a ten-year high, we should be promoting financial literacy and responsibility, not schemes that entice customers into a debt they might struggle to repay. It’s time to prioritize financial health over instant gratification.

Let us know what you think, please share your thoughts in the comments below.




  1. Lou

    January 14, 2024 at 6:53 pm

    Pandora’s box for the consumers. Walmart is the house in the gamble.

  2. Norman Smith

    January 14, 2024 at 7:22 pm

    I believe its a bad idea idea. Giving credit to people without accountability is never good. This country is already dealing with substantial debt is already falling towards social governance. America was built on creating jobs and being self reliant and that’s what makes it great. Falling in to debt is to easy with the credit plan. Which is not good for our economy.

    • Wm

      January 21, 2024 at 10:54 am

      America was once a Great Country. A country known for Manufacturing everything people needed to live. Today we are a nation of Consumerism and build/manufactur almost Nothing! We have become dependent on other countries to manufactur everything we consume in our lives. We have so many people who need good paying jobs & affordable products to buy. We buy everything from overseas companies and buy it on credit cards because we don’t make enough money to buy the items outright. People are mislead into believing that buying anything on credit is the way to go & they will be able to pay for it later on, only to discover that they are paying double the amount for the items, because of the ever increasing interest rates on the credit issued to them. It’s a racket to draw people in who wouldn’t have purchased the items in the first place, because they didn’t have the money to pay for it. I believe it is going to be a very Bad thing for the people who use these new methods to buy things. They don’t have the money to pay for them now and they won’t have the money to pay for it later on. They just see an easy way to get it now. Without realizing what the consequences of the fast & now purchasing option will be down the road. There is nothing good going to come from this method for purchasing items. If you don’t have the money for it now, you probably won’t have the money to pay for it later on, plus the interest they charge for the credit extended. This is a bad idea for the people who want new items but can’t afford them. It’s never going to work out for the public. It will only cause more people to incur more debt than they already have.

  3. Jeremy

    January 14, 2024 at 7:47 pm

    This is a way for retailers to increase sales revenue by enticing customers to buy big ticket items that they would otherwise consider to be too expensive.

  4. Temper

    January 14, 2024 at 8:02 pm

    If i don’t have the ‘cash’ to pay for something, I don’t buy it!

    • Jeremy

      January 18, 2024 at 8:19 pm

      Unfortunately, too many Americans choose to emulate their government and spend more money then they have on things they don’t need.

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