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Red Flag: Consumers are Using BNPL to Cover Everyday Expenses

CNN Business

Buy Now, Pay Later installment plans have become popular among consumers seeking to spread out the cost of big-ticket purchases. But now, rising prices have some cash-strapped shoppers reaching for these alternative payment methods for everyday purchases, such as their daily coffee, gas station fill-up or grocery run, as well.

That’s a concern for economists and consumer advocates, who say the surge in the use of these services, coupled with a lack of transparency and little regulatory oversight, leaves them wondering just how much debt Americans are actually getting into.

While other household debt, such as credit card spending and auto loans, is gathered and tracked by the Federal Reserve, Buy Now, Pay Later (BNPL) data is not included because the financing is typically provided by non-bank sources and not yet reported in a comprehensive manner to credit bureaus.