5 On Your Side: Buy now, pay later debt is on the rise, tell me about this news today

The recent consumer investigations and reporting regarding rising “Buy Now, Pay Later” (BNPL) debt highlight several major concerns facing shoppers:

• Rising Adoption for Everyday Essentials: Consumers are increasingly turning to installment services (such as Klarna, Affirm, and PayPal) not just for luxury goods or electronics, but to cover daily necessities like groceries, utility bills, and takeout.

  LendingTree

• Accumulation of “Phantom Debt”: Because many BNPL plans are split into small, interest-free payments across multiple providers, borrowers frequently take out several loans simultaneously. Because these short-term installment loans often operate outside traditional credit bureau reporting, consumers easily lose track of their cumulative monthly obligations.

  files.consumerfinance.gov. – Consumer Financial Protection Bureau

• Increasing Delinquencies and Hidden Fees: Recent consumer surveys and financial data indicate that nearly half of BNPL users have made a late payment within the past year. Missing installment deadlines often triggers steep late fees, account freezes, or compounding interest on deferred balances.

  LendingTree

• Impact on Credit Scores: While using BNPL generally does not help build a credit score, severe delinquencies or accounts sent to third-party collections can be reported to credit bureaus, damaging credit ratings.

• Consumer Protection Advice: Financial advocates advise shoppers to treat BNPL services with the same discipline as traditional credit, avoid stacking multiple installment plans at once, and review automated withdrawal schedules to prevent unexpected overdraft bank charges.