A recent study by the Consumer Financial Protection Bureau (CFPB) reveals that nearly two-thirds of U.S. consumers using buy now, pay later (BNPL) services are taking out multiple loans simultaneously. The report, which analyzed 145 million BNPL applications from 2017 to 2022, highlights that 61% of these consumers possess subprime or deep subprime credit scores. This demographic often carries significantly higher levels of other debts, including credit card and personal loans, compared to those who do not utilize BNPL services. The average number of transactions per borrower has increased, with 63% of borrowers taking out more than one BNPL loan at a time. Critics argue that BNPL may lead consumers to accumulate unsustainable debt, while industry representatives assert it provides a safer alternative to high-interest loans. Despite low default rates reported by BNPL companies, the CFPB's findings raise concerns about the potential risks for financially vulnerable consumers.
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