Buy Now, Pay Later Firms Cash in on the Plastic Surgery Boom

Camille Weston’s breast augmentation carried a $7,000 price tag. Her insurance, of course, wouldn’t cover it.

But a lender happily would. So the 22-year-old Salt Lake City resident opened a credit line — interest free for six months — and went under the knife. The procedure could turbocharge her TikTok following and might help the social media agency she runs with her sister, too. She repaid the debt before a single cent of interest accrued.

Weston is part of a growing cohort eager to spend on ultra-pricey cosmetic work and willing to borrow to fund it. Procedures like tummy tucks and lip fillers are on the rise, helped along by scores of social media influencers flaunting their results. And the bills that go along with them are increasingly being financed by specialty lenders, attracted by unusually high credit scores and even higher price tags.

“You wouldn’t think that they would need to have this type of financing,” said Shawna Chrisman, founder of Destination Aesthetics Medical Spa in Sacramento, California. “These are responsible people with their money, but they’re using this as an option to ideally get packages and higher-service treatments that have a higher ticket price.”

A setup like that is a sort of siren call for Wall Street. Major procedures like liposuctions and buccal fat pad removal were both up 7 percent in 2023 from the year before, according to the American Society of Plastic Surgeons. Injections like Botox were up 9 percent in the same period, with over 25 million minimally invasive procedures performed. With price tags that easily run up to several thousand dollars, financing all of this represents a new, unusual opportunity to put money to work.

When bankers packaged $250 million of cosmetic procedure loans into a bond earlier this year, debt investors placed so many orders that the deal was upsized to $400 million. The riskiest slices of the bond were even made cheaper, a sign of ravenous investor demand.

Investors said they bought the bonds because of their exposure to a prime consumer who can afford to spend money for Botox, dental work and other procedures. Many require repeat use. Botox lasts three to four months. Fillers a bit longer. Chemical peels should be done every few weeks to years, depending on the type. This keeps consumers borrowing, but given the profile of the borrower, likely to repay. About half of the loans in the bond were taken out by borrowers with credit scores of 700 to 850, according to bond documents seen by Bloomberg.

All of the loans in the deal were issued by Cherry Technologies, a buy-now-pay-later company laser-focused on healthcare. Cherry breaks down treatment bills ranging from $200 to $10,000 into smaller instalments for customers and is one of several financing options available at clinics like Chrisman’s.

Big Loan Book

It was the first time Cherry assembled a loan book big enough to tap the broader financial markets after having done smaller, private financings in the past. The growth comes as prices for the procedures soar: The average price of a breast augmentation increased 13 percent from 2022 to 2023. Brazilian butt lifts went up 19 percent to $7,264 and facelifts 22% to $11,395.

With prices like that, it’s not a wonder a cosmetic lending boom is afoot. Consumers who can’t borrow to cover the costs, or choose not to, sometimes turn to more extreme methods of financing the procedures.

“I just wanted to feel better about myself,” said Bree Cruz, a 32-year-old stay-at-home mom from Temecula, California. She paid for a tummy tuck and breast augmentation in part by serving as a surrogate. “This gave me a lot more confidence. It just made me feel like myself again.”

Back at Chrisman’s clinic, a variety of financing options are available. Chrisman offers clients payment through Alle, a partnership between Cherry and Allergan, the maker of Botox. She also offers CareCredit, a health and wellness credit card by the financial firm Synchrony that can be used on cosmetic procedures.

CareCredit and competitors like Alphaeon give users low-to-no interest promotional periods they would not get from other cards. For the current 12 months, Chrisman clocked about $771,000 in sales using CareCredit — up from roughly $474,000 in the previous 12 months. Meanwhile, the average credit score for CareCredit users at her practice is 710.

There are concerns that financing cosmetic work incentivises consumers to spend on services they don’t need and also can’t afford. At the same time, research from the Federal Reserve Bank of New York found that buy now, pay later plans are disproportionately used by people with more fragile financial situations, including those with lower incomes, lower credit scores and those who have been recently rejected for credit applications.

Specialised Cards

After promotional periods end, annual percentage rates for specialised credit cards are higher than average. The most recent national average APR across all credit cards is 21.76 percent, according to data from the Federal Reserve Bank of St. Louis. CareCredit’s can be 32.99 percent. Alphaeon’s can reach 31.99 percent. This shouldn’t make a difference if users pay their balances off in full, but could sting if they fall behind.

Executives at CareCredit and Alphaeon say their underwriting systems help avoid lending to consumers who can’t afford to repay their loans. Cherry declined to comment.

Lisa Homsy didn’t finance her procedure, but still went to great lengths to get the best value for her money.

The 36-year-old content creator from Canada was quoted $14,000 for a breast augmentation domestically. Even in Mexico, the cost was $7,000.

Instead, she travelled to Turkey, where she got the surgery and a seven-night stay in a hotel for about $6,000. She found the clinic through TikTok and sent them a message via WhatsApp. To figure out which surgeon would do the procedure, they asked her to send a photo of her breasts.

“I was like ‘where are these photos going?’” Homsy said. “They were like, ‘Yeah we just want to connect you with the right doctor.’”

It all worked out, and she is pleased with the results.

By Charlie Wells, Carmen Arroyo and Claire Ballentine