The Consumer Financial Protection Bureau (CFPB) has released a comprehensive study revealing significant trends in Buy Now, Pay Later (BNPL) borrowing among consumers. The report indicates that over 21% of consumers with credit records utilized BNPL loans in 2022, marking an increase from the previous year. Notably, a majority of these borrowers had subprime or deep subprime credit scores, highlighting the accessibility of BNPL for those with limited credit options. The study also found that 63% of BNPL borrowers took out multiple loans simultaneously, with many holding debts across various BNPL providers. This trend raises concerns as BNPL borrowers were more likely to carry higher balances on other unsecured debts, such as credit cards and personal loans. The CFPB's research aims to fill the data gap surrounding BNPL use, as these loans are not typically reported to credit bureaus. The findings underscore the growing reliance on BNPL, particularly among younger consumers, and the need for regulatory oversight.
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