Consumers are continuing to embrace buy now, pay later loans. After all, they’re an option that is as easy as pressing a button on checkout, they’re interest-free, and you don’t need a credit card.
In a report out this week, Adobe Analytics projects usage could drive as much as $84 billion in spending in 2024. That would be a 13% increase over last year.
But all the debt shoppers are racking up on platforms like Klarna and Afterpay is basically invisible to credit bureaus, lenders and economists.
The BNPL boom is concentrated among a certain type of consumer, said Sheridan Trent with the payment analytics firm TSG: “Among the younger generations, we’ve seen increasing adoption each year. And it’s just because they’re becoming more familiar with it.”
While it allows them to borrow with no or a less-than-stellar credit history, these platforms aren’t reporting most loans and delinquencies to credit agencies.