Study Shows More Consumers Turn to BNPL for Everyday Expenses

As prices rise, more Americans are using Buy Now, Pay Later (BNPL) loans to manage expenses. A study by J.D. Power found that 37% of U.S. consumers used BNPL in the last 90 days, up 5%. These loans let shoppers split purchases into smaller payments, often with no interest.

Experts say BNPL can be a useful alternative to credit cards because there is no compounding interest. However, problems arise when consumers rely on BNPL for everyday expenses like groceries. A report from the Consumer Financial Protection Bureau found that many borrowers carry multiple BNPL loans at once, sometimes from different lenders.

Consumer advocates also warn that some companies encourage users to move into longer-term loans with interest rates as high as 37%. Meanwhile, New York recently passed a law requiring faster refunds, limiting fees, and improving transparency about credit reporting.

Consumer Alert: Buy Now Pay Later loans surge in popularity, but experts warn of hidden risks