What People Are Missing About the New DoorDash Collab
11:56 Share

- This may be one of the most insane things I've seen recently, and that's coming from a guy who watched the iCarly reboot.

You mean Carly's mom finally entered the picture and we don't even get to see what she looks like? Get it together, Nickelodeon. I'll never get over this! But the insane thing we're talking about today? The new partnership between DoorDash and Klarna. Which means you can now go into debt for Crunchwrap Supremes, Chipotle burritos, and the Big Zack snack meal. And I wish I was making this up, but I'm not, and we need to talk about it, okay? It's a way bigger problem than you realize, and in today's video, you're going to learn why.

So here's the full scoop. In March of this year, DoorDash rolled out a new feature that lets customers check out using Klarna, the buy now, pay later giant that's already been helping people go into debt for Crocs, concert tickets, and dog birthday parties complete with barcudery boards. I'm sure they'll add in some cute photos.

Customers using DoorDash will now have three options when checking out. Pay in full, split the bill into four biweekly payments, or push the whole thing back until their next paycheck. Now, obviously, this is a terrible idea. But it gets even worse when you look at what Klarna's CCO had to say in the press release announcing this deal. Ahem.

Our partnership with DoorDash marks an important milestone in Klarna's expansion into everyday spending categories by offering smarter, more flexible payment solutions for groceries, takeout, and retail essentials, or making convenience even more accessible for millions of Americans.

Well, run for office, why don't you? You're a hero, Klarna. That's sarcasm, isn't it? And by the way, I am far from the only person saying this whole thing is stupid. I've never been more aligned with the entire financial community at large. And I've seen a lot of people reacting to this stuff online. I've yet to find anyone who thinks it's a good idea. And per usual, the internet has already meme-ified this and delivered big time. Let's take a look at some of the best ones. DoorDash debt collection outside your door because you missed the Chipotle payment.

That's not what you want to see. The year is 2038 and you owe $50,000 of burrito debt to DoorDash, but you can pay it all off by living in Mr. Beast's minivan for 80 days. This actually feels like a future reality show that I would like to host. Reach out, Mr. Beast. Born too late to ever own a home. Born too soon to live for free in the metaverse. Born just in time to finance a pizza from Domino's.

Oh, let's do one more for fun. Oh, that's our boy Dave Ramsey. What do you mean you have 11,000 in DoorDash debt? You know that's going to be a real call on the Ramsey Show one day and we'll all look back and say, remember when that was just a meme and it was a twinkle in Dave Ramsey's eye and now it's real life? It was birthed into reality because of the stupidity of the American people? Calm down. What did your yoga instructor say? Breathe into your spleen. Surrender to your pelvis.

What did that just mean? Bottom line, pretty much everyone agrees that this new development is cuckoo for Cocoa Puffs. And I'd like to point out that I kind of predicted this over two years ago. Roll that beautiful bean footage. Okay, so the trend we're seeing right now is sky-high interest rates with credit cards. We're seeing it with car loans. We're seeing it in the housing market. And so because of that, we're going to see a huge spike in consumer debt, which means people will turn to terrible options like...

buy now, pay later. So I think we're going to see a huge spike, especially with younger generations turning to buy now, pay later, where they put everything on for payments, right? What are those companies called? The fintech companies? Afterpay. Klarna, Afterpay, Affirm, Zazzle. It's so cute that they think they invented this.

I found a newspaper the other day. We were cleaning out our house. We're moving when Nixon resigned. Okay, I think Dave is heading into boomer territory. We're just going to let him go there on his own. I ain't got anything else to do. All that to say...

Told you so. This is not a new trick. These companies have spent years and years trying to get you into debt for literally everything, and it's helping them grow at exponential rates and make billions of dollars. Target already has a partnership with Affirm, one of Klarna's main competitors. Even Shein got in on the action with a Klarna partnership. And the only thing dumber than making payments on a burrito is financing a Shaquille Oatmeal t-shirt. It's clever, and I actually like the shirt, but I'm not doing it for payments. I can afford all $15.

That's how I know I've made it. - Well, now you're just bragging. - But here's the deal. It's fun to make jokes about Klarna and DoorDash joining forces to combine food delivery with debt and sell it as convenience, but this stuff is genuinely dangerous. It's like two toxic people coming together to form one.

Super toxic relationship. I would even go so far as to call this predatory. And I'm gonna explain why in just a second. But first, I wanna talk about something else that's predatory, online data brokers selling your personal information. Yeah, your home address, phone number, even your family member's information, it's all out there on these shady sites. And that makes you an easy target for scammers, AI impersonators, and digital harassment.

And that's why I use DeleteMe, one of the sponsors of today's video. They help protect your info by scrubbing it from these data broker sites and sending you a report that shows exactly what was removed and how much time they saved you. And DeleteMe doesn't just hope an algorithm gets it right. There are real humans doing the work behind the scenes

all year long. And right now you can get 20% off their annual plans by going to join delete me dot com slash George or click the link in the description. And before we get back to talking about buy now, pay later burritos, let's discuss a much better use of your money, putting it into a high yield savings account with online bank Laurel Road, another sponsor of today's video. Laurel Road offers top tier APY that brick and mortar banks could only dream of. And that means your money will grow a lot faster than it would by sitting in a traditional savings account. Plus, there's no minimum balance required to open an account.

and your deposits are backed by FDIC insurance. And best of all, they never nickel and dime you with sneaky fees. You can open an account today by heading to laurelroad.com/george or just click the link in the description below. Okay, there are three reasons why this DoorDash Klarna collab is super sleazy.

Number one, it's going to prey on poor people. Klarna's whole marketing strategy is built on convincing people that they're a helping hand, a friend in a time of need. After all, their tagline is, get this, "Get financial breathing room." And their website is full of material talking about how they give customers financial freedom. Well, let's stop and think for a second about who would be drawn in by the idea of getting breathing room for a pizza delivery. Because it's not the same demographic that's using Klarna to finance Coldplay tickets.

It's 100% going to be the people who are truly struggling with money and see this as their only option to get what they want. And that's part of what makes this so slimy. Now, a Klarna spokesperson did claim that they, quote, assess a customer's ability to pay each and every time they want to make a purchase using Klarna. And I can't imagine that their standard for what qualifies someone for a purchase is very high.

because Klarna's entire business model is predicated on people using their service and spending way more than they should. Which brings us to reason number two, this is such a disaster. It is designed to make people overspend. And that's not my opinion. It's something Klarna outright brags about.

One of the main selling points they highlight in their marketing on their website to potential retailers is that the customer's average order value goes up when using Klarna to pay for the items in their cart. Over the years, Klarna has seen customers increase their spending by as much as 45% in some industries when paying with their installment plan.

And this shouldn't be much of a surprise, because part of what gets people sucked into buy now pay later is that it keeps you from feeling the sting of your purchases right off the bat. It's not all your money right now, just give us a little, give what you can, pay the rest later. And so they get you to pay these little bite-sized chunks over time, which makes overspending a lot easier to stomach. Instead of seeing

$100 disappear in that cart, you can just give them 25 bucks and pay the other 75 later. And what do you do? You go, well, I guess I can add more to the cart. I mean, it lowered the amount I was already gonna spend. Why not? And I get that this may not seem like a huge deal on the surface since practically everyone is overspending these days, regardless of whether Klarna enables them to do it.

This is America after all, land of the free, home of the broke. And so absolutely there's personal responsibility in people not overspending, but these companies are making it super attractive, super easy with such little friction. And overspending with Klarna is a major problem because of reason number three.

It's a giant trap with interest and fees. Now it is true that if you make all your payments on time with a Klarna installment plan, you won't pay a dime in interest or fees. But the second you slip up, turn out the lights, bud, party's over. Because missing a payment with Klarna can trigger late fees and/or interest rates of up to 34%. Not even credit cards charge that much. They don't have the audacity. And when you're screwing your customers worse than credit card companies, it's time to take a moment to reevaluate your life choices.

And for all the people out there telling themselves that they won't miss a payment, I get it. But the data says there's a 50-50 chance that you're wrong. Because half of people who use a buy now, pay later plan wind up missing a payment. Think about it. They're not crushing it financially. They're likely already paycheck to paycheck. Maybe they don't even qualify for some credit cards. And Klarna says, hey, over here, we got you covered, bud. So putting a McDonald's order on an installment plan means you're literally flipping a coin to see whether you'll be paying 34% interest on your Grimace Shake. Enjoy it.

especially on the way out. That cannot be pretty. - Hmm, it's actually not bad. - Hopefully by now, we can all agree that this DoorDash Klarna collab somehow makes an even worse combo than Beyonce and country music. And how she won the Grammy? I don't know. I have no, tell me. Seriously, tell me, tell me. Did she pay people off at the Grammys? - Don't ask questions you don't want the answer to, buddy. - So what should you take away from all this? A few things. For starters, don't use Buy Now Pay Later, ever.

It's a giant trap that at best causes you to overspend up to 45% and at worst will screw you with massive interest rates. Next, definitely don't use buy now pay later on a DoorDash order. The prices are already inflated.

Okay, borrowing money for a Doritos Locos taco that's already twice the price is straight up Doritos Loco. No taco. Next, and I can't believe I have to say this, budget for your food. Okay, make it easy on yourself. Use the EveryDollar app to make a plan for your money so you don't have to scramble or rely on debt when you need a quick meal. And you can do this for free. Just go to everydollar.com slash George or use the link in the description to get started. Oh, and if you're living paycheck to paycheck,

Delete these freaking apps off your phone. Stop ordering food delivery altogether, okay? Eating out is a luxury. It's entertainment. And DoorDash is ultra luxury. And financing your DoorDash is stupid on steroids. And finally, please, I'm begging you,

Don't doordash a burrito, but then complain about inflation and wait for someone else to fix your problems. Okay? It's like lighting your couch on fire and then getting upset that the living room feels too warm. And before I wrap, let me say this. If you have used Klarna or any other Buy Now Pay Later program before, I'm not here to judge you. This video is not about guilt. What it is about...

is freedom. And that is something you will never achieve by relying on these terrible companies who are peddling financial freedom and financial breathing room. I want you to have actual financial breathing room, real margin, not the kind that supposedly comes from putting chicken nuggets on an installment plan. So if you're looking for a good place to start, I recommend taking the 30-day money detox that I outline in this video coming up next. So keep watching or click the link in the description to check it out.

That's it for today's video. If you enjoyed it, click that like button for me, hit the subscribe button so you keep getting more of this sweet content. Thanks for watching. We'll see you next time.