The rising costs of living and limited job growth have popularized 'buy now, pay later' services, particularly among younger Americans. A significant portion of those under 45 has utilized these loans for entertainment and essential spending. Although these loans enable interest-free large purchases, they may lead to overuse and unmanageable debt. With imminent changes to credit reporting practices, their impact on FICO scores will increase. Experts emphasize utilizing these loans responsibly by distinguishing between needs and wants and planning purchases rather than making impulse buys.
Buy now, pay later loans gained popularity during the pandemic, especially among young people. While these loans can help you make large purchases without paying interest, they can also easily be overused.
About 4 in 10 Americans under the age of 45 say they've used buy now, pay later services when spending on entertainment or essentials.
Whether you're a first-time or recurring user of buy now, pay later plans, there are expert recommendations to use this tool responsibly.
Buy now, pay later plans divide purchases in monthly installments, typically in four payments and are marketed as low or no interest loans.
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