As holiday shopping ramps up, Buy Now, Pay Later (BNPL) services are seeing unprecedented growth, with consumers spending a staggering $991.2 million on Cyber Monday alone. In 2023, BNPL spending in the U.S. reached $75.1 billion, marking a 14% increase from the previous year. This trend is particularly notable among younger consumers, with over half of Gen Z and Millennials utilizing these services. While BNPL offers flexibility and can encourage spending among those who typically avoid credit cards, experts warn of significant financial risks. Many BNPL users, especially younger ones, face challenges such as missed payments, debt collection issues, and a higher likelihood of financial hardship. Recent regulations from the Consumer Financial Protection Bureau aim to provide consumers with more rights and protections, yet the potential for overspending remains a concern. As BNPL services continue to gain traction, consumers must navigate these offerings carefully to avoid falling into debt traps.
Read the full article here.