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25% of consumers recently used a buy now, pay later loan, report finds. What to know as they become popular

CNBC

As buy now, pay later programs become more common, some shoppers are using this payment structure to make ends meet.

Americans owe $17.5 trillion across credit cards, mortgages, auto loans and other forms of debt, according to the Federal Reserve Bank of New York. About $1.12 trillion of that is on credit cards.

Buy now, pay later, or BNPL, loans often don’t appear on a credit report, serving as a kind of “phantom debt” that’s not reflected in those tallies.

Such short-term financing plans are the second-most used form of credit payment among consumers in the U.S., according to a new report by NerdWallet.

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