Buy Now-Pay Later (BNPL) services have gained immense popularity, especially among younger consumers, allowing shoppers to purchase large items and pay in installments without interest. Companies like Afterpay, Klarna, and Affirm offer quick approvals and no hard credit checks, making it easy for at least 100 million U.S. consumers to use the service. However, experts warn of the potential pitfalls, as late payments can lead to debt collection and financial strain. The average BNPL debt for Americans stands at around $1,000, with 56% of users expressing concerns about the risks associated with overspending. While BNPL may help improve credit scores in the future, it is crucial for consumers to track payment due dates and consider using auto-pay options to avoid falling behind. As regulations are set to tighten in the industry, the coexistence of BNPL and traditional credit cards is expected, but consumers should remain cautious.
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