Does America Have a Buy Now, Pay Later Problem?

Buy Now, Pay Later (BNPL) loans through companies like Klarna, Afterpay, and Affirm have grown steadily since 2020, and these loans now offer options to finance regular household bills like rent, gas, and utilities. Are BNPL loans good for Americans, or a risky symptom of today's economy?

Loans for Electricity and Rent: New York Times (Lean Left bias) noted that Americans spent $160 through BNPL loans in 2025, nearly twice the spending from 2023. The Times highlighted that more and more consumers are using these loans for daily essentials rather than consumer indulgences, noting a LendingTree survey that found that half of the company's users "said they could not make ends meet otherwise." Though BNPL companies frame their loans as an alternative to interest-heavy credit card debt, The Times also highlighted concerns that these companies have created "hundreds of billions of dollars in consumer debt that isn't captured in traditional economic analyses and snapshots" because their loans exist outside the mainstream credit ecosystem.

What Do These Companies Think? Ryan Metcalf, Flex's vice president of public affairs, told The Times, "We can't solve income, or the price of rent and affordability. What we can help people solve is a timing issue. It's harm reduction."

Interest Free? Straight Arrow News (Center) reported that BNPL companies "quietly" add interest fees through late payments, payment rescheduling fees, and other hidden costs. According to Straight Arrow News, one-third of BNPL borrowers accrue interest on their loans, and about half of users have paid late fees as a result of a missed payment. Missed payment fees are typically $7-8, which often surpasses the cost of interest, Straight Arrow claimed. In line with The Time's findings that more and more borrowers are using BNPL loans for things like rent and utilities, Straight Arrow News cited stats showing that 46% of users have used pay-later loans on groceries.

The Most Financially Destructive Force in America: Ted Jenkin, writing for Fox News Opinion (Right) in August 2025, took a stronger stance, arguing that "Buy now, pay later is the worst thing for consumers since payday loans." Jenkin noted that credit card balances hit an all-time high of $1.12 trillion, and with the normalization of BNPL loans, "we've built a nation that's not just living paycheck to paycheck—it's now borrowing paycheck to paycheck." Ultimately, Jenkin argued that "we need to stop pretending that BNPL is some kind of harmless financial tool" and instead acknowledge that "it's the fast track to delinquency and bankruptcy for people who can least afford it."

Written by the AllSides staff (of humans). Learn more. Support our mission. Suggest an improvement to this summary.