Buy-now-pay-later (BNPL) loans, often termed "ghost debt," are surging in popularity, particularly among Black American shoppers for groceries. These loans offer the allure of interest-free purchasing but hide risks like overspending and late payments. Experts argue that non-reporting to credit bureaus leads to undetected debt accumulation. A study by the Federal Reserve Bank of Kansas City found 20% of BNPL users fall behind on payments, with some borrowing from other lenders, exacerbating their debt. Black and Hispanic users face higher risks, with significant credit card debt and lower savings. Despite these dangers, BNPL companies market themselves as better than credit cards. Experts suggest options like PayPal’s interest-free payments but urge consumers to read the fine print.
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