Buy Now, Pay Later (BNPL) services like Affirm, Klarna, and Afterpay offer a convenient way to split online purchases into multiple payments without immediate interest. While they help avoid upfront costs and credit card debt, they come with risks. Longer-term BNPL plans may charge interest rates comparable to credit cards, and missed payments can harm credit scores. The Consumer Financial Protection Bureau (CFPB) has been investigating BNPL's impact and advocates for treating BNPL like credit card transactions, demanding similar consumer protections. These include dispute investigations, pausing payments during disputes, crediting refunds for returns, and providing billing statements. While BNPL companies like Klarna and Affirm have mixed reactions to these regulations, users like Domenica Quintana appreciate the changes but remain cautious. The CFPB welcomes public opinions on the new rule until August 1 to refine these guidelines further.
Read the full article here.