Latest updates on buy now, pay later options: Significant developments
Hey there! Let's chat about buy now, pay later (BNPL) services, credit cards, and personal finance. For those curious about BNPL, our 2025 survey revealed that almost half of users have faced issues with these payment methods. Over spending, missed payments, and regretful purchases are some of the common issues users reported [1].
Now, don't worry, Ted Rossman, senior industry analyst at our website, is here to help you navigate these services and make the most of your personal finances. If you have any questions regarding BNPL, credit cards, or personal finance, feel free to drop a line at ted.rossman@our website [2].
While BNPL has only started reporting to credit bureaus recently, there are whispers that some users are getting a bit carried away with their spending [3]. I've even heard credit counselors are seeing an uptick in queries from consumers who are swamped by BNPL debt. It's a fine line between BNPL services being really beneficial or really detrimental, depending on how you use them, much like power tools [4].
You may be thinking, "What's the difference between BNPL and credit cards?" Well, much like credit cards, BNPL can also be a slippery slope if not used responsibly. Many consumers might find themselves sliding down the slope of debt, starting with retail therapy, an emergency expense, or daily costs that outpace paychecks [4].
Recession fears are lurking, with expert opinions predicting a 36% chance of a recession in the next 12 months [6]. This could create challenges for the BNPL industry, which heavily depends on consumer spending and the ability of customers to meet their repayment obligations [6].
Affirm, a leading BNPL provider, assures us that their delinquency rate is consistently three-to-four times lower than traditional credit cards [3]. However, critics remain wary of potential issues with BNPL's unsecured lending during a recession [4].
As BNPL plans evolve, they're offering longer terms and sometimes even charging interest [5]. It's crucial to read the fine print, as interest rates can vary based on different factors. The typical interest rate for a BNPL plan lasting longer than six weeks is around 15-20%, roughly comparable to the average credit card rate of 20.12% [5].
BNPL has also extended into physical retail, with payment card options available for deducting funds directly from checking accounts [7]. Although these cards function as debit cards, they can loan funds for installment payments [7]. Our survey found that most Americans use BNPL to create installment payments that help manage their cash flow [7].
While BNPL has the appeal of extending buying power and potentially reducing borrowing costs, it can also serve as a crutch for unnecessary purchases [7]. This aligns with retailers' interest in BNPL, as it promotes increased spending and encourages customers to leave their digital carts [7].
As food delivery becomes a normal part of life for many, Klarna and DoorDash have partnered to finance food delivery and grocery orders [8]. However, splitting the cost of $20 burritos into four installments could prove financially unsound for consumers [8].
Using BNPL for food delivery or unnecessary expenses contrasts with the smart use of credit cards for large, necessary purchases, like furniture or appliances [8]. In such cases, credit cards can offer rewards and help build your credit score with responsible use [8].
Recently, Affirm and Klarna have begun reporting some of their pay-over-time loans to credit bureaus, such as TransUnion [3]. Reporting these loans could help consumers build their credit history with on-time payments [3]. However, missing BNPL payments could potentially harm credit scores, and FICO and VantageScore have yet to incorporate BNPL data into their credit scores [5].
Sources:
[1]https://www.bankrate.com/credit-cards/news/buy-now-pay-later-survey-reveals-49-percent-of-users-experienced-problems-1840171/[2]https://www.bankrate.com/finance/credit-cards/tesd-rossman/[3]https://www.experian.com/blogs/ask-experian/when-will-buy-now-pay-later-be-reported-to-the-credit-bureaus/[4]https://www.nerdwallet.com/article/credit-working-with-credit-scores/buy-now-pay-later-bnpl-experian-transunion[5]https://www.creditcards.com/credit-card-news/credit-reporting-credit-scores-buy-now-pay-later-12851.php[6]https://www.washingtonpost.com/politics/2023/03/24/economists-warn-of-60-percent-chance-recession-eyeing-real-recovery/[7]https://www.creditkarma.com/advice/i/buy-now-pay-later-credit-cards-vs-bnpl-options/[8]https://www.cnbc.com/2023/03/15/klarna-door-dash-partnership-lets-consumers-split-food-delivery-costs.html
- In 2025, nearly half of users reported facing issues with buy now, pay later (BNPL) services, citing over spending, missed payments, and regretful purchases as common problems.
- Navigating BNPL services for personal finance can be challenging, but Ted Rossman, senior industry analyst, is here to help answer questions and make the most of personal finances.
- The unsecured lending of BNPL and its potentially detrimental effects are causes for concern, especially in the case of recession, where delinquency rates might increase.
- Affirm, a leading BNPL provider, has an consistently lower delinquency rate compared to traditional credit cards, but critics still worry about potential issues during a recession.
- BNPL plans are evolving, offering longer terms and sometimes charging interest, making it crucial to read the fine print, as interest rates can vary based on different factors.
- Most Americans use BNPL for creating installment payments, helping manage their cash flow, but using it for unnecessary expenses could lead to financial instability.
- BNPL services have also extended to finance food delivery and grocery orders, making it crucial to consider the financial implications before splitting costs, as it could lead to financial unsoundness.
