Buy now, pay later options are becoming more accessible to consumers. A quarter of Americans surveyed in April 2024 said they used buy now, pay later services in the past 12 months, according to a recent report from NerdWallet.
The number of buy now, pay later loans increased nearly 1,100% between 2019 and 2021, according to data compiled by the Consumer Financial Protection Bureau.
The rapid growth has some analysts concerned because where there are loans, there is debt — but exactly how much debt is still unclear.
A December 2023 report from Wells Fargo concluded that the “Buy Now, Pay Later market may be small now, but if we don’t know how fast it’s growing, it logically follows that we simply cannot know when it will be a problem.”
“We’ve often referred to this as phantom debt, where it’s sort of flying under the radar and not really something that anybody has a good grasp on,” Shannon Grein, one of the authors of the December…
