Did You Know There’s Predatory Lending For A Pair Of Sneakers
the big prices for name-brand sneakers, while over-the-top for many, have proven to be major moneymakers. Michael Jordan’s Nike deal has made him the richest athlete of all time, but The Root reports that some companies are taking things to a whole different level, offering lease terms and finance rates for sneakers.
This may be a bit of a headscratcher, after all, terms like these are generally bounced around when you are looking to buy a new house or car—but for sneakers? While some may chuckle at the idea behind this, The Root points out while there is a bit of genius to the idea (people love their new sneakers), there is a hint of predatory behavior that may make some people uneasy.
America has a long history of borrowing, in many ways, the economy is built on it. In some examples, it has ended poorly for many people, and a sneaker isn’t on the same level as a credit card or mortgage, if you imagine the way this potential deal breaks down to a teenager wanting to look good, it paints a bizarre picture. For example, if a pair of shoes costs $300, a teenager has the option to pay as little as $26.37 a month to own it, with a 10% interest rate. To date, no stories have come out of people getting their shoes repossessed if they miss their payments, but one has to imagine there is some sort of contingency in place.
One company, Affirm, allows stores to use their services as an option to buy. For stores that choose to do so, when a customer browses shoes, they can get a monthly rent-to-own breakdown of what payment for their shoes would be. As absurd as it may seem, Affirm clearly sees an audience here, but only time will tell if people are willing to take the plunge.
As a close to the article, The Root posted a picture of Affirm’s staff that the company has on its About Us page. With an extreme lack of diversity on the staff, the final question of the article is who exactly is profiting and who could be suffering when it comes to this new financial idea?