Chase has announced that, effective October 10, 2024, customers will no longer be able to use Chase credit cards to pay for third-party Buy Now Pay Later (BNPL) installment plans. The move is likely driven by concerns over customers incurring layered debt, which can lead to financial overextension and increased default rates. BNPL plans, offered by companies like Klarna and AfterPay, allow consumers to pay for purchases in installments, often with high interest rates. When combined with credit card payments, the debt can become unmanageable for many. Chase's decision aims to mitigate the risk of customers defaulting by preventing the use of their credit cards for these services. Although Chase benefits from interest charges on unpaid credit card balances, the risk of widespread defaults among BNPL users appears to outweigh these gains. This proactive step indicates significant data pointing to BNPL users as high-risk borrowers, prompting Chase to implement this preventative measure.
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