As the holiday shopping season approaches, consumers are increasingly turning to "buy now, pay later" (BNPL) payment plans, with a projected $9.3 billion in spending expected in November alone. This trend is particularly popular among younger shoppers and those with limited access to traditional credit, as these short-term loans allow for initial payments at checkout and subsequent installments over a few weeks or months. While BNPL plans can promote financial inclusion and help consumers manage their budgets amid rising costs, experts warn of the potential pitfalls, including the risk of excessive debt and "loan-stacking" where individuals take on multiple loans without proper oversight. Many BNPL loans are not reported to credit bureaus, complicating lenders' ability to assess borrowers' creditworthiness. As retailers benefit from increased sales, consumers must navigate the fine line between convenience and financial risk during this bustling holiday season.
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