Buy-Now-Pay-Later Loans Nearly Double for $200 Bills as Households Struggle With Essentials
Updated
Updated · The New York Times · Aug 18
Buy-Now-Pay-Later Loans Nearly Double for $200 Bills as Households Struggle With Essentials
3 articles · Updated · The New York Times · Aug 18
Summary
Buy-now-pay-later borrowing has nearly doubled in the past couple of years, with loans increasingly used for electricity, water, health insurance, dental care, rent and mortgage payments.
Fixed installments on bills such as a $200 expense paid back at about $25 a week have made the products attractive to consumers squeezed by emergencies, maxed-out credit cards and rising monthly costs.
For some borrowers, the loans have shifted from discretionary purchases to basic survival: one Baltimore consumer now spends about $700 a month repaying BNPL debt while borrowing again to cover groceries, insurance and repairs.
The appeal is that missed payments usually bring minimal or no late fees and a borrowing freeze rather than compounding credit-card interest, helping explain why BNPL is becoming what one market expert called working capital for the modern middle class.