Buy Now, Pay Later (BNPL) programs have surged in popularity, offering consumers the chance to purchase items without immediate financial burden. These programs typically feature 0% interest over fixed periods, making them an attractive option for those unable to afford large sums upfront. However, financial experts warn of potential pitfalls. BNPL can lead to accumulated debts as these payments add to monthly financial obligations, potentially disrupting budget management. Additionally, BNPL debts often remain unreported on credit scores, posing a risk of "phantom debt" that can encourage overspending and affect financial health if payments are missed. Despite these risks, with careful planning and a solid repayment strategy, BNPL can still be a beneficial financial tool.
Read the full article here.