The Hidden Dangers of ’Buy Now, Pay Later’: Why Nearly 1 in 4 Users Are at Risk

Buy Now, Pay Later (BNPL) services have surged in popularity, with firms like Klarna and Affirm offering consumers the allure of splitting purchases into manageable installments. Yet, recent data reveals a troubling correlation between BNPL usage and financial instability.

A July study by the Financial Industry Regulatory Authority (FINRA) found that nearly 25% of Americans used BNPL in the past year. These users are disproportionately likely to engage in fee-heavy behaviors—minimum credit card payments, overdrafts, and exceeding credit limits. More alarming, 40% have missed BNPL payments, and many are stacking multiple loans simultaneously.

The trend has crept into essentials: a quarter of BNPL users now deploy it for groceries, marking a stark shift from discretionary spending. Unlike traditional credit products, BNPL often sidesteps credit checks, masking debt accumulation.