"Buy now, pay later (BNPL) works like it sounds. Shoppers buy goods instantly through lenders like Afterpay, Affirm and Klarna and pay them back over time. Because many loans are easy to access, interest-free for limited or set periods, and don't require any long-term commitment, it's an increasingly popular purchasing option. Especially for people with no or limited credit history, BNPL can make large or unexpected purchases more manageable."
"But like any form of credit, BNPL comes with drawbacks. If you don't pay back a BNPL loan, it can get sent to a debt collector. From there, it can be reported to credit bureaus. Those missed payments could hurt your credit score. And a lot of BNPL borrowers run into trouble. According to a 2025 survey by Lending Tree, 41% of respondents who used BNPL loans said they made a late payment last year."
Buy now, pay later (BNPL) usage surged during the holiday season, with more than $1 billion financed on Cyber Monday and a projected $20.2 billion for the season, up 11% year over year. BNPL allows shoppers to buy goods instantly through lenders like Afterpay, Affirm and Klarna and repay over time, often with easy access and limited interest-free periods. BNPL helps people with little or no credit history manage large or unexpected purchases. However, BNPL carries risks: missed payments can lead to debt collectors, credit bureau reporting, and lower credit scores. Many borrowers miss payments; a 2025 survey found 41% reported a late payment.
Read at www.npr.org
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